German-Arab Business Forum in optimistic spirit

German exporters sold around $12 billion worth of goods and services to the Gulf countries last year. And provisional export figures for the first quarter of 2005 show very strong growth of 50% to the emirates and 42% to Saudi Arabia.

Against this backdrop the 8th annual German-Arab Business Forum was bound to be an optimistic affair, although when the German delegates wanted to be gloomy they only had to refer back to their own economy whose growth has almost stalled despite being the third largest in the world after the US and Japan.

However, many of the challenges facing the Germans are not so far removed from those facing the Arab World. There is high unemployment, a need for economic reform and greater regional co-operation, as one speaker noted during the forum.

Egypt was in the spotlight with a number of presentations. The stability of the local currency, now actually rising against major currencies, was much appreciated by German exporters who felt this was likely to persist. However, the actual opportunities for foreign investment are still comparatively limited, and this remains mainly a market for building on past successes thanks to renewed economic growth.

Many speakers also referred to the 'Dubai Syndrome' or should everybody try to be like Dubai? Arab delegates generally seemed very proud of the success of Dubai, as a sign that success was possible in the Arab World. But there was a disagreement between those who believed Dubai to be a unique case, and that only one such trading hub could exist in the region, and those who clearly wanted to copy aspects of Dubai's economic policy.

Invest in Sharjah

German exporters are only just beginning to get their act together with regard to the emirates where they lag behind UK exports, for example. But the launch of the UAE-German Business Council at the end of May is symbolic of a new concerted effort to interest German industry in the UAE. And the focus is not just on Dubai: Sharjah's Hamriyah Free Zone Authority was a sponsor of the Berlin Forum and is hoping to recruit more German firms.

But trade and investment is a two-way affair, and Germany also hopes to attract more investment from the Arab world. The Berlin based Best Invest Group was looking for investors for Berlin commercial real estate, which is currently in a slump and can offer a 9% yield with a blue-chip tenant on a 15-year lease; one reason why US and UK private equity funds have been investing in German property recently.

The forum also heard from FDP chairman Dr. Wolfgang Gerhardt who is likely to be the next foreign minister after the federal elections this autumn if the Christian Democrats form a coalition government. But his speech underlined that the German foreign policy towards the Middle East is unlikely to change much under a new regime with its broad support for peace and economic reform.

More than ever the annual German-Arab Business Forum seems to have become an official event, with a strong input from the German Chambers of Industry and Commerce. But this remains a great place for networking and business contacts, and with business booming in the Middle East this was truer than ever this year.