“German environmental technology has a lot 
of potential in Israel”

Allemagne-Israël

Grisha Alroi-Arloser from the German-Israeli Chamber of Commerce sees plenty of scope for further cooperation.

Interwiew :

Mr Alroi-Arloser: You are the CEO of the German-Israeli Chamber of Commerce, which was founded in 1967. 28 years later it was officially recognized by the Association of German Chambers of Commerce and Industry (DIHK) as a German Chamber of Commerce Abroad.

How has the cooperation developed since then?

A lot has changed in the way the two countries interact economically. In 1967 trade between Germany and Israel was worth 100 million US dollars. Today it’s six and a half billion – that’s an annual increase of nine percent over this period. In the early days Israel exported mainly agricultural products: Jaffa oranges and their various derivatives, textiles and some plastics. Today, agricultural products make up perhaps three percent. When we look at the types of goods that go back and forth, the striking thing is that they are more or less identical. They are mostly chemical, medical-technology and IT products. The situation is different in the case of motor vehicles, which only go from Germany to Israel. Overall, two thirds of bilateral trade is made up of German EXPORTS to Israel, one third are Israeli EXPORTS to Germany. The Israelis repeatedly complain about this, but it is unlikely to change in the foreseeable future. If anything, the gap is likely to widen.

Why is that?

Germany is simply one of the world’s strongest exporting countries. Israel ranks 43rd in Germany’s trade statistics in both EXPORTS and imports. However, when we break the figures down to the MENA 
(Middle East & North African) region – from Morocco to Iran – Israel is third in EXPORTS from Germany and second in imports to Germany – after Libya in each case. Of course, the only thing Germany imports from Libya is oil. All the other countries, which are much larger and also have oil, export less to Germany than Israel. Israel is thus Germany’s number-two-to-three trading partner in the region. It should be 
added overall, however, that Germany’s importance in Israel today as a country of origin for products no longer has the status it had two decades ago.

Which countries have become more attractive for Israel?

Israel is becoming more and more international, and the economy, consumers and industry are increasingly looking to the Far East. As a result Germany, which was Israel’s number-two trading partner after the USA for decades, is now only number three, having been overtaken by China. I expect India will also slip in-between them soon. In Europe, Israeli now EXPORTS more to the UK than to Germany. If we take a close look at the figures, we see that we Israelis, as exporters, have a problem in German-speaking countries and Scandinavia

How do you explain that?

It’s not an easy one to answer; perhaps there are cultural reasons. I only know that we sell more in England, France and Belgium – and that has nothing to do with the diamonds – than in Germany or Austria. As a result, Israeli ECONOMIC POLICY is focusing less on core Europe and more on emerging markets like Brazil, Russia, China, South Korea, Taiwan or Vietnam.

To what extent does Israel’s position in the Middle East play a role in trade relations?

2012 was a difficult year. We had to cancel two major projects for lack of participants, although we mustn’t forget that Israel is not a particularly interesting market from the point of view of entrepreneurs. Furthermore, some countries might worry that a stronger commitment could perhaps cause them difficulties in Arab markets. Israel is a small country that is in the news too often. German entrepreneurs have said to us: “I would have come, but my wife won’t let me.” At the moment, people just don’t want to go to Israel to do market research.

What can or should economic development agencies do?

There are several sectors in Israel that are very interesting for German companies and whose potential is by no means exhausted. For example, there is a great need in the fields of environmental technology, power engineering, energy efficiency and building services engineering – and German products, German quality are sought after. But Israelis also look at the price, which is why a breakthrough is more difficult in the consumer-goods sector. How­ever, German companies can score points here in the capital-goods sector. Another area is cooperation in the transfer of know-how, finance and technology. These things are more interesting because they are more durable, but they are also more compli­cated to manufacture. So we initiated the German-Israeli Life Sciences Committee five years ago, and launched the German-Israeli Renewable Energies Committee in 2012, with the aim of strengthening such cooperation ties, which go beyond the export-import business. These are areas where there is a considerable convergence of interests in the two countries.

Does this mean that more should be done to spread information and reduce fears?

Economic development agencies must identify and promote industries where cooperation seems to make sense; they must encourage their clientele to come to Israel, whether they are accompanied by politicians or not. Matthias Platzeck, Minister President of the state of Brandenburg, practises this best in my opinion. He comes every year with a business delegation, and there is news of success every time. This generates continuity, and that’s important. You can’t just make a mark on a single occasion and then do nothing for seven years. You have to get the companies used to the fact that Israel is a market which your own politicians believe in. That’s very import­ant. The Germans are good and flexible, and they have interesting products, but they must come to Israel.

How well does cooperation function once it has got going?

The synergies are there. It’s a fact that technology companies from Germany get on really well with the way the Israelis handle technology and innovation. This applies to companies like SAP, Siemens, Deutsche Telekom and Software AG – all huge supertankers that have decided to have research and development conducted in Israel.

How do Germany and Israel differ in how they tackle projects?

In the way they handle risk. That’s a part of life here. You live with the fact that you have to improvise. Furthermore, Israelis are very enterprising, both in private and professionally. When you ask someone about their ideas for a future career, a university graduate with a technological degree is much more likely to say “I want to set up a business” than his or her German counterpart. The Israelis will never say: “That’s impossible.” They’ll say: “Of course it’s possible,” and then sit down and figure out how to do it. People often say Israelis usually know the shortest route the second-best solution. Second-best solutions are good enough in many cases. ▪

Interviewer: Gisela Dachs

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