Germany is the world champion in manufacturing exports, ranking even above Japan. Not surprisingly, it exports far more goods to the UAE than it imports. Thus, it is exemplary for the European Union at large, which is the only economic bloc worldwide that commands a trade surplus with the GCC countries and the UAE specifically. No wonder the issue of a more balanced trade relationship is coming up during high-profile meetings like the recent visit to the UAE of the German minister for economic affairs, Michael Glos, or the upcoming third Emirates Germany Economic Partnership Forum, which took place in Munich between May 9 and 11.
With 6.3 percent of all exports to the country, Germany is the fourth-largest exporter to the UAE after China (10.3 percent), India (9 percent), and Japan (6.8 percent). On the other hand, only 1 percent of the UAE exports reach its own shores. While Germany imports oil and gas from other countries like Russia, Norway, and Libya, the products of its manufacturing and automobile industry enjoy great popularity in the UAE. A Mercedes or a BMW still makes the heart of an Emirati car lover beat faster – were there a comparable passion for exported goods from the UAE in Germany, trade relations would be more balanced. Germans love to travel, and are finding their way to the UAE in increasing numbers. Last year there were about 250,000 German hotel guests, and nearly half a million passengers arrived from Germany – a considerable portion of the UAE’s 5 million annual tourists. But this alone will not suffice. Until Germany relies more on energy imports from the Gulf region because of declining oil production in the North Sea, more balanced foreign trade can only come from the capital account – German foreign direct investment (FDI) in the UAE.
Germans might be the best engineers of the world, but their occasional risk adverse stiffness and lack of salesmanship command equal fame and notoriety. Thus, Germans have not leaped head over heels into the UAE's frenzied investment market, while others, like the Chinese, have been more active. The potential fields of cooperation are manifold. Germany is one of the major destinations for Arab health tourism. Many hospitals in Munich and Hamburg have special departments catering to the needs of their Arab patients, who are often accompanied by their families. They could open up branches in Dubai Healthcare City and offer these services in closer vicinity to their patients. Dubai International Capital is the third-largest shareholder in DaimlerChrysler, with an investment of $1 billion, while Volkswagen was in talks with Abu Dhabi two years ago about setting up production facilities in that emirate. The UAE might therefore attract FDI in this important industry one day. Meanwhile, German airport manager Fraport has shown interest in running Abu Dhabi airport, which will have a comparable size to that of Frankfurt, with 50 million passengers annually.
One important aspect of relations will be to complement trade with intensified institutional cooperation and exchanges on the cultural and political levels. The Gulf Research Center has launched a master's degree in international relations with the Free University in Berlin, and has teamed up with the GTZ, the German state-owned enterprise for international cooperation and sustainable development, to provide sectoral consultancy solutions to Gulf institutions. Another example is German's Goethe Institute for cultural exchanges, which has also just opened a branch in Abu Dhabi.
All in all, the importance of relations, most notably trade relations is likely to grow. The recent assumption of the honorary chair of the German Near and Middle East Association (NUMOV) by former German chancellor Gerhard Schroeder is only one of the many signs in this direction.
