The Middle East is an enormous market for Germany, a highly specialized export nation. The label Made in Germany enjoys an excellent reputation worldwide, particularly in the Middle East, where it is often understood as a guarantor for high quality. German exports to the Middle East reached 34.33 billion EUR in 2014, growing by over 9% since 2013, despite decreasing exports to Iraq and Yemen. Abdulaziz Al-Mikhlafi, Secretary General of the German-Arab chamber of trade, encourages German companies to perceive the region as a partner and industrial location, instead of reducing it to a mere export market.
"While competitors from China, Japan and Korea are eager to invest, German companies are more hesitant."
The Arab World is a vast market offering promising returns to companies active in the region. Many Arab countries are investing massively in infrastructure, electricity, health, education and the water-sector. One country in desperate need of reconstruction is Iraq. Iraq is facing the challenge to rebuild its economy and to overcome political instability and terror with the help of immense natural resources.
The Iraqi economy is characterized by drastic ups and downs. Between 1840 and 1915 in the latter phase of Ottoman rule, the Iraqi region slowly incorporated into the world’s economy, exporting agricultural products and raw materials. Under British administration, the run for Iraqi oil began, leading to large British investments in this sector. After independence Iraq slowly grew to become a striving middle income country by the 1970s, with high growth rates and sizable foreign assets. Since then Iraq has fallen into debt and chaos facing a series of wars and political upheavals. Correlated to the domestic Iraqi’ economy, German-Iraqi business relations have flourished and ceased to zero.
Iraq, nowadays a country of 35.9 million inhabitants, still holds potential for foreign business. Iraq is estimated to have the third largest oil reserves in the world after Saudi-Arabia and Iran. The concrete number of proven reserves, provided by OPEC is 143,069 mil. barrels. Immediately after the Iraq War, investors from all over the world were on the qui vive to secure themselves a share of the lucrative reconstruction projects. However, the political instability and the poor security situation prevented many German firms from operating in Iraq.
In this book the key drivers behind German-Iraqi commerce will be examined.
Table of Contents
Introduction
Chapter 1: Theoretical Background
1.1 Theories of International Trade
1.2 World System Theory
1.2.1 The Middle East in the World Capitalist System
1.2.2 Iraq
1.3 Criticism of the World Systems Theory
Chapter 2: German Trade during the Ottoman Era
2.1 Rising European Interest in the Region
2.2. German Ventures in the Region during the Ottoman Period
2.2.1 Politics
2.2.2 Economy
Chapter 3: Iraq under British Influence
3.1 The British Occupation of Iraq
3.2. Hashemite Monarchy
3.3 British Oil Policy
3.4 The End of British Hegemony in Iraq
3.5 German-Iraqi Business 1918 - 1958
3.5.1 Weimar Republic
3.5.2 Third Reich
3.5.3 Federal Republic until 1958
Chapter 4: Baath Regime
4.1 Military Rule
4.2 The Iraq-Iran War
4.3 German-Iraqi Business 1958 - 1991
Chapter 5: Iraq under American Influence
5.1. US Interest in Iraq
5.2 The Gulf War I
5.3 Sanctions
5.4 Iraq War
Chapter 6: Post War Period
6.1 Economic Developments
6.2 German-Iraqi Business 2003 - 2013
6.3 Perspectives for Germany
Objectives and Research Themes
This paper examines the history of German-Iraqi commercial relations from the Ottoman era through 2015, analyzing how political upheavals, changing spheres of influence, and international power struggles have shaped business ties. The central research objective is to understand the drivers behind these fluctuating relations and to evaluate potential future developments for German companies in Iraq.
- The impact of World System Theory on explaining British and American interventions in Iraq.
- Germany’s imperial and industrial ambitions during the Ottoman period and the Baghdad Railway project.
- The influence of political shifts—from British mandate to the Baath regime and American dominance—on trade.
- The role of German industry in Iraq’s weapons and infrastructure development programs.
- The economic repercussions of international sanctions and war-related instability on bilateral trade.
Excerpt from the Book
The Baghdad Railway
The Baghdad Railroad serves as a notorious example for the longstanding German political and economic interest in the region, which nowadays entails modern Iraq.
The German railway engineer Pressel is known as the founding father of the Baghdad Railway project. Pressel had built railways across Europe and ended up spending the last 40 years of his life in the Ottoman Empire, first working as a technical director and from 1872 onwards as the General Director of the Turkish Railways. Pressel picked up on a vague idea of building a railway to the Persian Gulf. He designed initial proposals to build a network linking Istanbul, Ankara and Baghdad to Basra which were very well received, yet at the same time, deemed too expensive. Even in times of extreme financial hardship, Pressel was able to convince Sultan Abdulhamid of the enormous value of the railway for his empire. Pressel was convinced that the railway would obviously benefit both, the Ottoman Empire and the nation that built it, calling on German industrial interests to take advantage of the plentiful Ottoman resources.
Summary of Chapters
Chapter 1: Theoretical Background: This chapter introduces the World System Theory as a framework to explain how core states, such as Britain and the US, intervene in peripheral regions like Iraq to secure resources.
Chapter 2: German Trade during the Ottoman Era: This section explores Germany's initial economic interests in the Ottoman Empire, highlighting the ambitious Baghdad Railway project as a tool for political and economic influence.
Chapter 3: Iraq under British Influence: This chapter covers the transition of Iraq under British control following WWI, the decline of German-Iraqi relations, and the vital role of oil in British imperial policy.
Chapter 4: Baath Regime: This chapter analyzes the era of the Baath party, the nationalization of oil, and the peak of German-Iraqi economic ties leading up to the Iraq-Iran War.
Chapter 5: Iraq under American Influence: This section details the impact of US-led interventions, sanctions, and conflicts on Iraq's economic trajectory and the subsequent cooling of foreign trade.
Chapter 6: Post War Period: This final chapter examines the reconstruction challenges in Iraq post-2003, the limited success of German firms in a high-risk security environment, and future economic prospects.
Keywords
Germany, Iraq, International Trade, World System Theory, Baghdad Railway, Ottoman Empire, British Influence, Oil Policy, Baath Regime, Sanctions, Reconstruction, Foreign Policy, Geopolitics, Economic Relations, Infrastructure.
Frequently Asked Questions
What is the primary focus of this paper?
The work explores the long-term history of commercial relations between Germany and Iraq, tracking how economic interests have been deeply intertwined with political events and international power dynamics from the 19th century to 2015.
What are the central themes of the research?
Key themes include the role of resource control (specifically oil), the impact of major global powers on regional trade, the historical significance of German infrastructure projects, and the influence of political stability—or lack thereof—on foreign investment.
What is the main research question or goal?
The research aims to determine the key drivers behind German-Iraqi commerce throughout history and to assess whether German firms can successfully maintain or expand their footprint in Iraq given the country's turbulent history.
What scientific methodology is utilized?
The paper employs a historical-analytical approach, utilizing the World System Theory to contextualize the behavior of dominant core states and their impact on peripheral economies like Iraq.
What is covered in the main body?
The body chapters detail specific historical eras: the Ottoman Empire and the Baghdad Railway, British colonial control and oil policy, the Baath era and the Iraq-Iran War, the impact of American influence and sanctions, and the post-war reconstruction challenges.
Which keywords best characterize this work?
The work is characterized by terms such as geopolitics, foreign trade, oil concessions, post-conflict reconstruction, and historical bilateral diplomacy.
How did German-Ottoman relations influence later German-Iraqi ties?
The early ventures, particularly the Baghdad Railway, established an initial framework for German infrastructure engagement in the region, which created a legacy that German firms attempted to leverage during later stages of development in Iraq.
How did the sanctions era affect German business?
The sanctions period caused a dramatic collapse in direct trade, forcing German firms to operate under severe restrictions, leading to significant economic losses and a loss of market position compared to other international competitors.
- Quote paper
- Anna Richter (Author), 2016, German-Iraqi business relations. A struggle of economic, political and hegemonic interests, Munich, GRIN Verlag, https://www.grin.com/document/416076
