Germany and UAE: Endearing and enduring collaboration between two powerful global economies

The UAE established diplomatic relations with Germany in May 1972, mere months after it was founded, and in the ensuing 50 years, the two nations have built close, friendly, and multifaceted relations.

Cooperation and collaboration lie at the heart of these strong ties, be it working together at international fora, converging mutual interests, easing market access and diversification, or committing to alliances in energy, education, climate, infrastructure, and health. The strategic partnership of 2004 and the ‘Declaration of Intent’ agreement of 2017 co-signed by the two nations continue to boost and buoy these efforts.

The resulting success can be measured across various matrices and parameters. In June, the Federal Competitiveness and Statistics Centre (FCSC) announced that UAE-Germany non-oil trade exchange had exceeded Dh 478 billion from 2012 through 2021, weighing more than 14 million tonnes. Their data said trade exchanges between the two countries were distributed between Dh427.4 billion of imports, Dh17.1 billion of exports, and Dh33.4 billion of re-exports.

Despite the onslaught and the aftermath of the pandemic, bilateral trade grew by 12 per cent, from Dh31.5 billion at the end of 2020, to Dh35.3 billion at the end of last year. During 2021, cars and air vehicles ranked high on the list of imports from Germany at a value of Dh 4.3 billion and Dh 3 billion respectively, followed by medicines, automotive parts, and antiserums and immune products.

The UAE’s exports to Germany in 2021 was topped by insulated wires and cables, cigarettes, electricity savers, jewellery, and raw aluminium, while re-exports included telephones, turbo jets and turbo propellers and aircraft parts. Germany has been the UAE’s strongest trade partner in Europe for many years, and German manufacturers continue to use the UAE as a hub for the broader region. While these trade statistics are impressive, there are several other aspects of significance.

Mutually beneficial growth

Speaking to Gulf News in June, Oliver Oehms, CEO of German Emirati Joint Council for Industry and Commerce said trade statistics provide an incomplete picture. “It does not, for instance, reflect on the large and growing number of German service providers that have been venturing into the UAE for many years,” he pointed out. “The recent Covid crisis has been another push for especially small and medium-sized German entrepreneurs towards the UAE.” Of more than 1,000 German companies operating in the UAE, most are in machinery, machine tools, equipment, and vehicles, but the new trend is investments in knowledge-driven, sustainable businesses, he said.

While value-added services and industry-driven services are seen as exceptionally strong growth segments, mutually beneficial growth is also spelt out across the energy sector. In late September, the UAE signed an energy security deal to supply Germany with liquefied natural gas and diesel. The leaders of both nations, UAE President His Highness Shaikh Mohamed bin Zayed Al Nahyan and German Chancellor Olaf Scholz witnessed the signing of the Energy Security and Industry Accelerator (ESIA) agreement during the chancellor’s visit to Abu Dhabi, signalling the start of projects of common interest to both countries in energy security, de-carbonisation and climate action.

In a new deal, the UAE will deliver 137,000 cubic metres of LNG to Germany by year-end, and more in the coming years, at an advantageous fixed price. Meanwhile, oil giant Adnoc has completed its first direct diesel delivery to Germany and according to a company statement, will supply up to 250,000 tonnes of diesel per month in 2023, and reserve other LNG cargoes exclusively for German customers.

Meanwhile, renewable energy corporation Masdar is engaged in exploring opportunities in the offshore wind markets in Germany’s North Sea and Baltic that could generate up to 10GW of renewable energy production capacity by 2030.

Last week, the UAE Ministry of Energy and Infrastructure (MoEI) signed an agreement with global engineering and advisory company GHD in partnership with Germany-based Fraunhofer-Gesellschaft to develop its National Hydrogen Strategy, which will help establish the UAE’s hydrogen vision and shape its policy decisions on energy-mix diversification and net-zero targets by 2050.

Bilateral collaboration between the two nations also anchors emerging and advanced technologies in food and water security around climate change concerns. Earlier this year, Mariam Almheiri, UAE Minister of State for Food and Water Security discussed areas of collaboration with local and state government officials in Munich, Dusseldorf, and Aachen during a high-powered four-day trip to Germany.

“German companies were instrumental in developing key industrial sectors in the UAE, particularly energy, and UAE investments in the Federal Republic of Germany have grown steadily and exponentially, covering various strategic sectors,” Almheiri stated. “This strong foundation is an advantage to create additional opportunities for partnership that will further drive sustainable development of both our countries,” she said at a meeting in Bavaria.

4th industrial revolution

According to the State of Bavaria’s UAE office, the roster of 50 Bavarian companies in the UAE, led by Siemens, Rhode & Schwarz, Munich Re, Giesecke & Devrient and Bauer Spezialtiefbau, are both active and ambitious in terms of diversification.

During her visit, the minister inaugurated The German-Emirati Institute in Aachen to foster deeper collaboration on advanced technologies to develop joint Fourth-Industrial-Revolution projects. Almheiri, who has a degree in Mechanical Engineering from the Rhenish-Westphalian Technical University (RWTH) in Aachen also accompanied German Chancellor Olaf Scholz at Jubail Mangrove Park during his visit to Abu Dhabi. “The UAE and Germany share a commitment to using nature-based climate change solutions to preserve our planet and build a better world for future generations,” she tweeted from the reserve.

Cultural ties between the two nations hold strong. The German National Tourist Board (GNTB) says Germany recorded a whopping 318 per cent increase on overnight stays from Gulf nationals in the first six months of 2022, compared to the same period last year. “The GCC is the top Asian source market, therefore it’s unsurprising with our recent campaigns that there has been such a strong increase,” says Yamina Sofo, director of sales and marketing at the German National Tourist Office, the regional office of GNTB.

Germany’s recent campaigns in the UAE include German. Local. Culture – focussing on national crafts, customs, cuisines, and the diversity of the history-rich cities; Embrace German Nature – highlighting outdoor, nature-based activities and Feel Good – initiatives for environment-conscious tourists. The campaigns directly attributed to higher footfall, says Sofo.

Celebrating culture

Next month, The Dresden Opera Ball will bring the European Peace Chamber Orchestra Dresden to Dubai Opera with a stellar line-up including tenor Placido Domingo, soprano Marina Rebeka and conductor Anton Lubchenko, with Igor Butman Roman Lyulkin and Otto Sauter on saxophone, bass, and trumpet respectively. Presented by M Premiere and the Opernball Dresden, this event made its debut in 2006 in the city of Dresden and is now the largest classical entertainment event in the German-speaking world.

Hans-Joachim Frey, General Director of Dresden Semper Opera Ball, said in a statement that the event aims to build cultural bridges. “The main message is to have international cultural bridge building between Germany, the Arabic world, the UAE, and the European world. Culture brings people together, and Dubai is a centre for this.”

Marwen Sandid, Managing Director of Scheidt & Bachmann ME puts all this in perspective when he comments on recent celebrations of 50 years of UAE-German ties, and 150 years of Scheidt & Bachmann’s existence. “This friendship has stood the test of time and created bonds in so many sectors: economy, energy, culture, society, sustainability.

“For us, this means reliability and longevity,” he says of the global market leader in innovative parking systems and solutions. “It is why we chose the UAE as a strategic location from where to do business in the region.”

Sandid adds that he is made aware every day at work how highly the UAE holds German products, service ethics, and culture. “I believe economic and societal collaboration between the two countries will continue to thrive in the 100 years to come.”