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Commentary: Germany’s Middle East Opportunities

On the eve of Chancellor Gerhard Schröder’s trip to the Middle East, Deutsche Welle’s chief correspondent examines Germany’s political and economic opportunities in the region.

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Dubai is among the cities on Gerhard Schröder's Middle East itinerary.

German politicians who travel to the Middle East today profit from two conditions: On the one hand, Germany’s political superpower ambitions in this region are still very small. And unlike Britain and France, Germany has no history of trying to put its stamp on large parts of the Middle East.

Still, Germany’s "special" relationship with Israel has long hindered any intensive relationship in the region. Ties also remained hazy for decades as a result of the Hallstein Doctrine, a linchpin of West German politics that defined as an "unfriendly act" decisions by other countries to officially recognize the communist East German state. During that period, Bonn even held back from exchanging ambassadors with Israel out of fear that doing so would lead to a wave of Middle Eastern countries officially recognizing East Germany and, under a self-dictated script, force West Germany to sever its ties with the Arab states. The fact that some Middle Eastern countries sympathized with Germany because of its Nazi past was also assiduously overlooked here.

German technology: good but expensive

Now, 12 years after the fall of the Berlin Wall, those factors no longer play a role in German-Arab relations. Today, the relationship is focused on pragmatic issues, like bilateral trade. Though the heyday of trade ties seems to have passed – days when German firms were responsible for numerous important infrastructure projects, from highway construction to electrical supply, especially in Iraq. German technology still has a strong reputation in the Arab world, but countries like Saudi Arabia have become more conscious of expenses and have learned that engineers from countries like Korea are just as good as their German counterparts, but come at a fraction of the cost.

Changing lanes

However, new opportunities exist for Germany in the Middle East. Oil rich countries like Saudi Arabia and the United Arab Emirates have long been considering how to use their immense, but nevertheless still limited oil wealth, in order to prepare themselves for the future, when their "black gold" becomes sparser. The magic word here being "diversification." Germany, too, has realized that the broad diversification of the economic base in the Arab oil countries also offers new opportunities for German business. They will increase even further if the current trend of privatization and market-opening practices continues in these countries.

From Algeria to Saudi Arabia, and even in Iraq, the foundations are already being laid for a change from largely state-run to a private, business-oriented economy. That, too, increases opportunities for German businesses.

Additionally, projects once completed by German companies need to be renovated and new ones need to be undertaken. Now that private companies are using bidding processes for many projects, political relations don’t play as strong a role as they once did, when contracts were usually awarded by governments. Ostensibly, at least, that would also mean that companies can award contracts that they determine are most politically convenient.

Close ties: business and politics

Such tight integration between business and politics demonstrates that, increasingly, political contacts and relationships with the Arab world are shaped by economic interests. But that by no means negates the idea that an improvement in living standards can also help political relations between the Arab world and Germany.

Additionally, German relations to the Arab world aren’t in any way solely motivated by economic considerations. Take, for example, the country’s respected position as "moderator" in the conflict between Arabs and Israelis, a position it has been able to attain because of its special relationship to Israel. This role was a result of the Oslo Accord between the Israelis and Palestinians. Since the accord's signing, Germany has been able to maintain good and tight relations with both Palestinians and Israelis and has been able to help both as they search for a peaceful solution to their conflict.

Unfortunately, this roll has largely been destroyed through the developments of the Al Aqsa Intifada – because if the parties lack good will, then no outside party can help them. Especially not when, even if it wanted to, it wasn’t capable of implementing its policy with force.

Peter Phillip is Deutsche Welle’s chief correspondent.

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