Liechtenstein: Small in Size, Big in Ambitions by Anna Gawel For any new embassy starting out in Washington, making a name for yourself in a city already crowded with big-name embassiesóall vying for the same political influence, media coverage and public recognition as youóis no easy feat. But for an embassy that represents a nation the actual size of Washington, D.C.óthe name of which most Americans can scarcely pronounce let alone point out on a mapóthat task can be infinitely more daunting. Yet none of that phases the tiny principality of Liechtenstein, which recently set up a new embassy in Washington and relocated its U.S. ambassador, Claudia Fritsche, from the Liechtenstein U.N. Mission in New York. The move marked a major step for Liechtenstein, a picturesque, landlocked nation sandwiched between Austria and Switzerland, whose approximately 33,000 inhabitants enjoy a high quality of life thanks to a thriving industrialized economy and a booming financial services sector. ìTo open an embassy in Washington is actually quite a far-re aching foreign policy decision by the Liechtenstein government,î Fritsche recently told The Washington Diplomat. ìItís the first time that Liechtenstein is opening an embassy in a country that is neither one of its neighboring countries nor houses an international organization of which we are a member.î With a sleek new office at 13th and I Streets, NW, the ambassador and her two-person staff are ready to break into that exclusive world of power lunches and power brokering that Washington is so well known for and become a bona fide player on the D.C. diplomatic circuit. But first, they needed furnitureóand everything else that comes with getting an office up and running. Now, with the final finishing touches in place, the embassy and the ambassador are ready to make their D.C. debut. And even though theyíve come a long way in the five months since they arrived, as the new kid on the block, Fritsche knows the real work is only just beginning. ìIt is an enormous challenge to start from scratch,î said Fritsche, an amiable, well-spoken career diplomat. Fritsche is actually somewhat of an expert at starting from scratch, having begun Liechtensteinís first U.N. mission in New York 12 years ago. Her former deputy chief of mission has now taken over her duties at the U.N. mission while Fritsche sets her sights on the nationís capital, trying to adjust to what she describes as a decidedly different way of conducting business. ìI knew from the very beginning that Washington would be completely different from my work in New York,î the ambassador said, noting that the missions in the United Nations were much more mutually dependent on one another for voting and other support, which Fritsche said resulted in a ìdaily and very intense contactî with her colleagues. Here, however, that cooperative spirit doesnít work in quite the same way. ìIn Washington, the embassies, we are competitors,î Fritsche said. ìInstead of having 190 partners like in New York, we all have one partner hereónamely the United States, the host countryóand we all have the same aim: We want the attention of the host country for whatever issue is important for our country.î And the ambassador knows that one of the main issues she will need to tackle during her term is simply spreading the word out about Liechtenstein and dispelling some of the misconceptions people may have about her small nation. ìWashingtonians per se, but also the American public do know some things about Liechtenstein, but comparably very little,î Fritsche said. ìPeople who have seen pictures think we are a fairytale country with a prince who lives in a castle, but very often the knowledge doesnít go much beyond that. Maybe still that we are a financial center, a banking center, but of course there is much more to it than that, and I Ö see it as one of my foremost tasks to put Liechtenstein on the map and make it known for what it is.î What it is is a prosperous and modern nation built on democratic principles, a robust economy and living standards on par with Europeís largest cities, all of which stand as testament that bigger isnít always better. An independent nation for nearly 300 years, Liechtenstein is made up of 11 interconnected ìcommunities,î each with its own distinct character and history. The government is a blend of constitutional monarchy and democracyórun by both Prince Hans-Adam II as the official head of state and a 25-member Parliament elected directly by the people. Liechtensteinís natural beauty also adds to the countryís appeal. Breathtaking vistas of ancient castles nestled amid snow-tipped mountains are just some of the striking sights that attract tourists from Europe and the United States each year. With the Alps covering two-thirds of the region, Liechtenstein is a naturally popular winter sports destination, but a relatively mild climate in the spring and summer makes tourism a lucrative source of revenue all year round. However, tourism is not the only force behind the economyís rapid success story. ìLiechtenstein was of course in economic terms not a very interesting place until after World War II when economic development startedówe were until then very poor,î Fritsche said. ìBut since the 1950s, we have become an economic center, a financial center, and a very prosperous country,î she added, noting that the country ìprovides almost as many jobs as we have inhabitants.î In fact, with an unemployment rate that hovers around 1.4 percent and a ready pool of highly skilled workers, the Liechtenstein economy rivals that of most developed nations. This tremendous economic growth has been spurred by very low business taxes and liberal economic laws for foreign companies, which, in particular, has attracted a flood of banking and other financial services companies to Liechtenstein, making the tiny nation a major hub of fiscal activity. Fritsche said that a private sector driven by a free-enterprise mentality coupled with a strong, stable government are some of the reasons behind Liechtensteinís business-friendly atmosphere. ìOur entrepreneurs, they are pretty much on their ownóand they know that, so that probably contributes to the fact that they have to be extremely competitive. What the state contributes are liberal economic laws, a fairly small-size administration, a balanced budgetówhich means a nonexistent deficit or at the most a very, very low oneóand of course a stable political environment, and I think that Ö is why our industry is able to thrive as much as it does.î Liechtenstein also benefits from a healthy relationship with its neighbors, particularly Switzerland, an important trading partner with whom Liechtenstein shares a currency and open borders. In addition to being a haven for the financial services industry, the Liechtenstein economy generates such goods as electronics, textiles, pharmaceuticals, metal manufacturing and food products, most of which are exported to the European community. And Liechtensteinís strong emphasis on the environment and retaining its unique culture has allowed the nation to maintain its old-world charm while still becoming an industrialized, advanced society. Yet despite appearances, Fritsche stressed that life in Liechtenstein is not idyllic and that her nation does experience its share of difficulties: ìLiechtenstein, as small as it is, has exactly the same problems as other countries do, only on a smaller scale.î Some of these problems are a natural outgrowth of economic successósuch as high costs of livingówhile others are the inevitable result of simply being a small nationósuch as limited land area and heavy reliance on imported goods. The fact that Liechtenstein is an important global financial center has raised the countryís international profile, but at the same time it has raised questions about gaps in banking oversight and the potential vulnerability to money laundering and other financial crimes. However, since Liechtenstein enacted stiffer legislation last year and increased its cooperation with other banking nations, the government has blunted many fears about illicit funds. Fritsche added that her nationís monetary institutions now ìcorrespond to the highest international standardsî and that Liechtenstein has won praise from top U.S. officials in their fight to curb terrorist financing. ìOne of the fields where we discovered that improvement was needed was the field of enforcement,î Fritsche noted. ìLiechtenstein today has doubled the number of prosecutors that we had three years ago. We have almost doubled the number of judges that we had three years ago, and we have also established more financial supervisory mechanisms, including a financial intelli gence unit.î Although not a heavy hitter on the global political scene, Liechtenstein does wield power through its strong ties to the finance industry and its involvement in the United Nations and European organizations, such as the European Economic Area, which Fritsche said is the ìideal definition of our relationship with the European Union.î And although Fritsche said her nation supports the idea of a unified Europeóparticularly one that can act as a ìcounterbalance to the United States, both in the political and in the economic senseîóshe added that full membership into the European Union for such a small state as Liechtenstein is ìrather unrealisticî at this time. And with no army for more than century and a police force that numbers around 60 officers, Liechtenstein has no illusions about becoming a major international playeróit is after all, very small. Nevertheless, the loss of the space shuttle Columbia proved that even the biggest international event can touch such a small nation. The ambassador explained that the Columbia tragedy held an especially poignant sadness for her country because high school classes from five continents were chosen to send up a scientific experiment aboard Columbia, and Liechtenstein had been chosen to represent Europe. The Liechtenstein group worked for more than three years on their projectówhich was designed to see how carpenter bees behave in spaceóand they went to Florida to watch the doomed launch. ìThey feel very, very strongly about the loss of life and the abrupt end of this wonderful experiment,î Fritsche said, ìbut I think it has in a way also given them a lesson for life that not everything turns out as planned, and they got more than a glimpse of what science can be like. I think it will certainly mark each of them for life.î Fritsche added that she hopes to explore more educational opportunities and exchanges between the United States and Liechtenstein during her post, in addition to working with local charities and exposing American audiences to her nationís culture through future art exhibits and events. Plans are currently under way for a small congressional delegation to visit with members of the private sector in Liechtenstein later this month. Also on the agenda is a project called Image Liechtenstein, which will feature different cultural activities and visits by high-ranking representatives from Liechtenstein, with the logistics for that project being worked out over the coming year. For now, however, the ambassador still needs to focus on more practical matters, such as furnishing and moving into her official residence off Foxhall Road in Northwest Washington. Fritscheís government is renting both the residence and the embassy office for at least the next three years, until the ambassador settles into Washington life and can make a recommendation about buying permanent embassy space. So when asked the inevitable question of which city she prefersóWashington or New YorkóFritsche responded in true diplomatic fashion. ìThere is the melting pot and the excitement and the vibration of New York, and the fact that itís a city that totally absorbs youÖ. Whereas in Washington, although you have your plate full as you have it in New York, the pace is somewhat different and the quality of life is certainly very different,î the ambassador said. ìAlso it is very exciting to be in this center of power, this political environment where you meet a number of fascinating peopleÖ. And I of course also hope that once this embassy is a bit better established and once I have a bit more staff, I will be able to travel to other parts of the countryóbut this is the second stage.î Anna Gawel is the assistant managing editor of The Washington Diplomat.