Economics Minister: "Germany Has Good Ties to Arab Markets"

DW-WORLD.DE: Germany's trade with many of the Arab countries is continuing to boom with double-digit annual growth rates. But direct investment from Germany hasn't increased in these countries. How do you explain this?

Michael Glos: We are happy about the increase in exports. In 2005, exports to Saudi Arabia were up 32 percent from 2004 and in the United Arab Emirates there was an increase of over 21 percent. Ultimately this is a result of higher purchasing power due to rising oil prices, which, on the other hand, is painful for German consumers.

The oil nations have such a high base of capital that they are not necessarily dependent on direct investment from Germany for their continued economic development. However, German investment in Egypt, Libya and the United Arab Emirates is quite important.

The Arab world invests in Germany, particularly in stocks, but has stayed away from direct investment in companies and joint ventures. Why?

You're right. Kuwait, for example, and also the United Arab Emirates have invested considerably in German corporations in the past few years. In spite of plenty of on-site marketing, German hasn't had enough success in winning Arab investors for entrepreneurial endeavors.

In terms of security and prospective rates of return, authorities responsible for international investments in each Arab country prefer to invest in blue chips. Germany offers an excellent, broad investment basis in this area.

You recently traveled to Kuwait and a few of the other Gulf countries. Which concrete projects were mentioned or developed during your visit?

Thanks to their oil revenues, the Gulf countries are capable of modernizing their economies and they are using the capital very wisely. Considerable resources are going toward building up the infrastructure.

Thanks to our successful foreign economic policies, German companies have had very good access to the markets in these countries. German companies also have the know-how that is in demand there, which is why they have recently been involved in infrastructure building. In addition to roads and power plants, this also includes planning airports and container harbors.

Have there been any new developments concerning plans for a German Transrapid high speed magnetic train in the Gulf region?

Some of the Gulf countries are certainly very interested in the latest German transportation technology. The Transrapid offers considerable advantages over the conventional wheel and track system. Studies are currently being conducted on the feasibility and cost-effectiveness of various routes, which compare the wheel and track system with the magnetic hover train method.

Kuwait is the partner country in this year's German-Arab Economic Forum. How would you assess its economic relationships with Germany?

Our economic relationship with Kuwait has been very healthy for years, which is evident in the 2004-2005 trade figures. In 2005, German exports to Kuwait increased from 2004 by over seven percent, or 1.2 billion euros ($1.5 billion).

Important agreements like the investment protection contract and the double tax treaty have been in existence for several years and form the basis of a stable economic relationship. In July 2004, the establishment of a German-Kuwaiti economic commission was agreed on.

Ultimately, Kuwait's significant capital investment in Germany reveals the country's great trust in our positive bilateral economic relationship.

Arab economic and political decision makers say the Merkel administration demonstrates less interest in the Arab world than Gerhard Schröder's government did. Do you agree?

I cannot understand this at all. If you recall, I traveled to Kuwait, Qatar and the United Arab Emirates in the spring. Shortly after that, the foreign minister visited the Gulf countries. We are all representatives of the government and, as such, we are proof that this assertion isn't true.

The chancellor will certainly find a good opportunity to pay a visit to the region herself. She is very aware of its significance. Just recently, the prime minister of Kuwait met with the chancellor here in Berlin.

Since the beginning of this forum in 1999, Arab investors have complained about the complicated process of having a visa issued from the German embassy in the Arab countries. Why doesn't the Ministry of Economics take the initiative to resolve this ongoing problem?

Visa matters are incumbent on the Foreign Ministry in cooperation with the Ministry of the Interior. The Foreign Ministry has a huge responsibility, as far as visas are concerned. Considering the difficult international situation and threats at this time, the Foreign Ministry is obligated to issue visas with great care. For a so-called Schengen visa, the other EU member states have to be consulted.

The Ministry of Economics stays in constant contact with the Foreign Ministry to make the visa process for economic representatives from Arab countries as smooth as possible. To ease the process, visa applicants should remember to submit their documents well in advance of their trip -- for a Schengen visa, about 14 days beforehand.