Bilateral relations between the United Arab Emirates and Germany are poised to take on an entirely new dimension following the arrival in Berlin last night of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on a state visit.
Sheikh Mohammed is leading a top-level delegation, which includes Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Dubai Deputy Ruler, Ministers, top officials and senior business leaders. The UAE delegation seeks to further enhance and deepen the country’s already strong relations with European economic powerhouse.
Bilateral trade between the two countries increased to Dh32.68 billion in 2007, but it was weighed heavily in favour of Germany, which exported goods worth almost Dh30bn to the UAE last year. In return, the Gulf state exported goods worth Dh2.68bn to one of the Europe’s most industrialised countries.
According to German businessmen in the UAE, the rise in bilateral trade was because of an increase in the volume of German exports and the weakening US dollar.
The strong interest by both nations to establish a close strategic partnership is illustrated in the high growth in their economic and trade links, regular exchange of visits by their leaders, the signing of several co-operation agreements, the formation of a joint economic commission and a business council, and involvement of numerous German companies in projects in the UAE. In Germany, the UAE has long been one of the main Middle East investors.
According to officials, the UAE is Germany’s leading economic partner in the Arab world. For German foreign trade, the UAE (position 36 in the export statistics) is gradually become even more important than Hong Kong or Singapore.
More than 500 German companies and trade agencies operate in the UAE, including nearly 150 in Abu Dhabi and 250 in Dubai. German businesses have come together to form the German Business Councils in Dubai and Abu Dhabi.
Germany and the UAE have signed air transport and double taxation accords as well as an agreement on promoting and protecting investments.
“You can say that the relationship between the UAE and Germany has entered a stage of strategic partnership,” a UAE official said.
“This relationship covers various fields, including economy, trade, culture, environment, politics and other fields… Germany is actively involved in UAE projects, including ports, power, desalination and other sectors… Germany is also training UAE naval units under an agreement that will last several years,” he said.
Historic diplomatic ties
“The UAE set up diplomatic ties with Germany a year after it was founded in 1971 and over the past 37 years, the two countries have become so close that scores of UAE companies have become major investors in Germany while more than 500 German companies and trade agencies have poured into the UAE to do business.”
Stressing this partnership, German Chancellor Angela Merkel made an historic visit to the Emirates last year and met President His Highness Sheikh Khalifa bin Zayed Al Nahyan and other senior UAE leaders.
Officials said the visit ushered in a new era in UAE-German co-operation and expected a big leap in their ties. “We expect the relations between the UAE and Germany, particularly in trade and investment, to reach a very high level in the coming period,” UAE Ambassador to Germany, Mohammed Ahmed Al Mahmood, said recently.
“I see sustained growth in the future and a big leap in trade and investment between the two countries… the UAE is very interested in Germany as a major market and economic power… the growth is possible given their strong political relations and the fact that the UAE is very keen to attract German capital.”
He said the UAE is tied to Germany in an agreement for the protection of investment and prevention of double taxation, a joint economic commission and a joint business council. “All these point to a surge in co-operation in the next period and this will be supported by the regular annual meetings of the UAE-German Economic Partnership Forum… the establishment of the joint business council in May 2006 will have a strong positive impact on mutual investments.”
Cultural and mass media ties
The Emirates Centre for Strategic Studies and Research (ECSSR) said the UAE-German relations are not limited to the political and economic spheres, but are important in the fields of cultural, mass media and defence. Germany is helping train members of the Iraqi security forces in the UAE. In addition, it has also established Goethe Institute in Abu Dhabi.
During a visit to the UAE last May, a German Parliamentary leader paid tribute to the growing relations between the two countries but stressed more can be done to further consolidate relations.
Susanne Kastner, Vice-President of Bundestag, Germany’s parliament, said: “We wish to see more effort to build stronger and more developed relations with the UAE in the coming period because this country enjoys high respect and a special status among the German leadership and people.”
She hailed the developing democratic process in the UAE, particularly the decision to select Federal National Council through elections rather than appointment. “This is a very wise decision and marching in this direction will certainly support the democratic experience in the UAE and push it towards further development and advancement as was the case in Europe.”
Kastner said she had presented proposals to the UAE to send citizens to the German Bundestag to familiarise them with the democratic process and parliamentary activities in Germany. “The UAE officials welcomed this proposal and we hope to see UAE nationals in my country soon.”
Germany, which assumed the EU presidency last year, is accorded privileged partner status in the UAE. Beyond the economic ties and the extensive trade relations, both governments have expressed their intention to step up relations in the political sphere as well. Two visits by former German Chancellor Gerhard Schroeder in two years and numerous ministerial visits have fostered a favourable climate for close co-operation.
Stepping up cultural relations is another objective of the strategic partnership. Germany has a very good reputation in training, particularly medicine and the engineering sciences. Agreement has already been reached on exchanging more students and German co-operation in setting up facilities for vocational and technical education. The German Academic Exchange Service and the Goethe Institute want to increase their local presence in the UAE in future.
The UAE hosts a 8,000-strong German community and more than 320,000 German tourists visited the Emirates in 2006.
The sixth Session of the Joint Commission on Economic Co-operation took place in Abu Dhabi in December 2006. The UAE delegation was headed by Minister of Economy Sheikha Lubna Al Qassimi and the German delegation was led by Bernd Pfaffenbach, State Secretary at the Federal Ministry of Economics and Technology.
Both delegations had an extensive exchange of views on how to enhance and intensify the bilateral co-operation in various economic, trade and technical co-operation fields.
Sheikha Lubna emphasised the importance of strategic UAE-German economic partnership and asserted the need to work even harder to achieve higher economic success for both countries.
“The UAE and German private sectors need to explore new business and investment opportunities and should work closely together,” she said.
The minister underlined the importance of signing the FTA agreement between the GCC and the EU. As Germany was assuming the Presidency of the EU, Sheikha Lubna confirmed that a new world of economic and business opportunities would be created for both sides as a result of the agreement.
She urged the German side to work harder and closely with all parties in order to finalise the FTA agreement.
She also raised a number of major issues and concerns for the UAE Government and private sectors such as the issue of visa restrictions for UAE citizens, business leaders and representatives.
“This issue should be addressed and resolved to support efforts to expand and develop our relations.”
Sheikha Lubna stressed that German companies can take advantage of many existing opportunities in the following sectors: heavy and light industry, manufacturing, tourism, education, health, financial institutions and investments, energy, vocational training, consumer protection and environmental and water management issues.
The UAE-Germany Economic Partnership Forum annually gathers all important bilateral economic and trade institutions.
In 2005 in the city of Essen it was inaugurated by Sheikh Hamed bin Zayed and former Chancellor Gerhard Schroeder. In 2006 Sheikha Lubna was present. In 2007 the forum was held in Frankfurt. Given their belief in the importance of the private sector, the two countries agreed to establish a Joint Business Council in 2005 to complement the economic forum and other agreements aimed at expanding trade and investment. It consists of 15 leading businessmen with a strong engagement for the German-UAE relations and meets twice a year.
The last meeting took place alongside the Joint Commission in December in Abu Dhabi.
The Siemens factor
The German giant Siemens has been awarded several contracts in the UAE, covering power, desalination and other sectors. This underscores the growing role of German firms in the country’s development process.
Siemens Power Transmission and Distribution constructed a turnkey substation (400/132 kV/22 kV) for the power supply on Saadiyat Island off the coast of Abu Dhabi. The order, which is worth about 120 million euros (Dh645m), was placed by the state power supply company Transco (Abu Dhabi Transmission & Dispatch Company).
In addition to construction of the substation, the contract also comprises engineering and commissioning. The substation is scheduled to go into operation at the end of this year. A contract was signed between Mubadala Development and Siemens Medical Solutions to build and operate a specialist Molecular Imaging Centre (MIC) in Abu Dhabi to include the Siemens PET CT (Positron Emission Tomography - Computed Tomography) diagnostic system and the Cyclotron radioisotope delivery system. The $21.7m three-phased contract entails designing, building, and operation and maintenance of the MIC. Scheduled to open during the second half of this year, the facility will be the first of its kind in the region.
Siemens has also been awarded a major contract by the Abu Dhabi Water and Electricity Authority for the construction of a power plant with an installed generating capacity of 1,500MW. The new combined-cycle facility, to be situated in Shuweihat, is expected to cost $896m.
The German giant auto maker Volkswagen is also involved in the UAE by investing in a joint car assembly facility in Abu Dhabi industrial city. The plant to assemble heavy trucks will cater to demands of the UAE market and other GCC states.
German Business Council in Dubai
German businessmen have set up a council in Dubai to oversee their assets in the emirate following a surge in their business in Dubai and the UAE. It was created nearly 18 years ago and has steadily expanded ever since.
The German Business Council Dubai is a non-governmental and
non-profit association founded in 1990. At present, the German Business Council Dubai has 190 members comprising German and UAE companies, their representatives as well as German, UAE and other nationals engaged in business activities in Dubai and the Northern Emirates.
The objective of the German Business Council Dubai is to support commercial and personal relations between its members and to promote economic, social and cultural relations between the UAE and Germany by:
- Establishing a platform for its members to communicate with representatives of the government and private sector both in the Emirates and in Germany.
- Developing and reinforcing contacts between organisations and associations sharing a mutual interest in the UAE and other GCC countries.
- Organising business and social meetings, seminars, conferences and other related events.
The German Business Council Dubai holds monthly meetings on the first sunday of each month to receive guest speakers, discuss selected topics, find business opportunities and get to know each other.
The monthly gatherings as well as any individually announced social events are open to members, guests and anyone who is interested in the work of the association.
Bilateral visits to the UAE
- November 2007 – Committee for Economy and Technology of the German Bundestag (Federal Parliament)
- February 2007 – Federal Chancellor Angela Merkel and Federal Minister for Economy Michael Glos
- May 2006 – German Foreign Minister Dr Frank-Walter Steinmeier
- May 2006 – German Minister for Economy, Michael Glos
- February 2006 – German Minister for Environment Sigmar Gabriel
- May 2007 – UAE Minister for Economy Sheikha Lubna Al Qasimi (Frankfurt)
- November 2007 – UAE Deputy Prime Minister Sheikh Hamdan bin Zayed Al Nahyan (German-Emirati Friendship Society, Berlin)
- November 2006 – Dubai Chairman for Civil Aviation Sheikh Ahmed bin Saeed Al Maktoum
- November 2006 – UAE Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan
- June 2006 – UAE Minister for Economy (Hamburg)
- May 2006 – UAE Minister for Economy (Munich)
- March 2006 – Abu Dhabi Tourism head Sheikh Sultan bin Tahnoun
In addition, Germany regularly invites UAE decision-makers to study recent political, economic and technological developments.
UAE-German ties enhanced by Mohammed’s visit