The UAE has been home to a large number of German companies for many years. From large corporates to small and medium-sized firms, some 1,000 companies currently operate in the UAE. The strong presence of such a large number of German companies is not only proof of the excellent investment and business climate in the UAE, but also of the maturity of this market. German companies utilise the UAE not only as a hub for trade and logistics, but also to run critical services such as headquarters and R&D centres, for the region at large.
Emerging simultaneously with the growing business community in the Emirates, the German Emirati Joint Council for Industry and Commerce (AHK) was founded in 2009, building upon the successful establishment of two trade offices 10 years before. The Council forms part of the global network of German Chambers Abroad (AHKs —Auslandshandelskammern in German). As the first of its kind in the GCC region, it now comprises nearly 500 corporate members from both Germany and the UAE. With a team of 30 professional staff members across the region, and led by a honorary board of 18 C-level business representatives, the AHK acts as a bridge between the two business communities.
Surely, the current Covid-19 pandemic did not leave the German business community in the UAE untouched. Nearly 80 per cent of the AHK members are expecting a drop in annual turnover this year. Most companies are struggling with making sure that its qualified teams weather the storm safely. In this regard, the challenges in the UAE are not very different from the ones in Germany — both economies are strongly depending on regional and international market developments, stable supply chains and smooth logistics. At the same time, the outlook for 2021 is equally slowly turning more positive. With industrial demand picking up again, the robust business communities in the two countries are ready for a quick rebound. This for sure will be happening in 2021, being driven by significant packages of additional liquidity in Germany or by a resilient and stress-resistant infrastructure and system in the UAE.
Retrospectively, the establishment of the Competence Centre for German Export Finance in the AHK by the German Federal Ministry for Economic Affairs and Energy in September last year demonstrates a visionary move, while German export business in the MENA region has been benefitting from German government-backed guarantees for many years. Exporters, banks and local importers now have access to qualified support and advice on German ECA/Hermes-cover directly here in the region. With deteriorating financing conditions due to the pandemic, such instruments and support have become particularly important in insuring payment receipts for German exports.
Looking forward, there is significant potential for taking the bilateral business relations to another level. Covid-19 has been accelerating cultural change not only in the UAE, but also with regards to the future of the German-Emirati economic relations. Just to make it clear — yes, the excellent infrastructure of free zones will continue to be highly relevant as a hub for German products and services. But the new future will be digital — the fourth industrial revolution (4IR) bears enormous potentials for developing the UAE further as a global platform for future technologies and solutions. And Germany is ready to partner with its Emirati peers. A recently launched joint task force on 4IR will be presenting first outcomes soon. Stay tuned.
— The writer is CEO, German Emirati Joint Council for Industry and Commerce (AHK)