International Review: Federal Republic of Germany
The new material of the cycle "International Review" will focus on a country that is traditionally one of five trade, economic and investment partners of the Republic of Belarus - the Federal Republic of Germany.
The Federal Republic of Germany is located in Central Europe and borders nine states (Denmark, the Netherlands, Belgium, France, Luxembourg, Switzerland, Austria, Czech Republic, Poland). No other European country has more neighbors. In the north, Germany has access to the Baltic and North Seas. In the south, it is surrounded by the Alps.
FRG includes 16 federal states: Bavaria, Baden-Württemberg, Brandenburg, Hesse, Mecklenburg-Vorpommern, Lower Saxony, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, North Rhine-Westphalia, Thuringia, Schleswig in Tom Holstein, including three cities - Berlin, Bremen, Hamburg.
Among the most developed and economically powerful lands are North Rhine-Westphalia and Lower Saxony, Bavaria and Baden-Württemberg.
Germany is a founding country of the European Union, a member of the EU-Eurozone monetary union, a member of the UN, OECD, OSCE, NATO, G7 and G20.
Interesting fact. Germany changed its capital seven times. At various times, the capital of Germany was: Aachen, Regensburg, Frankfurt am Main, Nuremberg, Berlin, Weimar, Bonn (and East Berlin). Since 1990, Berlin again became the capital of the country.
Economic situation (2019):
- GDP - 3.436 billion euros (+ 0.6%);
- GDP per capita - 41.3 thousand euros;
- public debt: 59.2% of GDP
- inflation - 1.4%;
- exports - 1,310.9 billion euros;
- imports - 1,081 billion euros;
- balance - +229.9 billion euros;
- main export positions: cars and spare parts for them, machines, chemical products, metals and metal products, electrical appliances, medical equipment, optics;
- main import items: cars and spare parts for them; computer technology (data processing equipment, other electrical equipment), machinery and equipment, oil, gas.
The basis of Germany's economic strength is the innovative industry potential. The country produces high-tech goods that are in demand both in the local and global markets.
The German auto industry, with its six global car brands - Volkswagen, Audi and Porsche (both owned by VW), BMW, Daimler, Opel - is one of the driving forces of the global automotive industry.
Interesting fact. Germany is one of the world's largest car manufacturers. VW Golf is one of the best-selling cars of all time.
One of the largest chemical producers in the world is the BASF Group, which operates 390 production sites in over 80 countries.
The representative of the electrical and electronic industry, the multinational conglomerate company Siemens, works in 190 countries. The application solutions it offers - from medical technology to renewable energy - are highly innovative.
Despite the presence of many global players, small and medium-sized businesses remain the backbone of the German economy, which accounts for almost 99.6% of the country's enterprises.
Interesting fact. Small and medium-sized enterprises account for about 52% of all production in Germany. Four out of five Germans start their career in such companies.
Foreign trade of Germany
The German economy is export-oriented. According to the Federal Statistical Office, every fourth job depends on exports.
Over 67 years (1952 - 2019) Germany has a trade surplus. It began to grow rapidly since 2000 and grew from 59.1 billion euros to 229.9 billion euros in 2019 (3.9 times).
Germany's top five export trading partners include the United States, France, China, the Netherlands and the United Kingdom.
The largest importers are China, the Netherlands, France, the USA and Poland.
Business climate. Investment policy
The business climate in Germany is characterized by the development of the domestic industrial and consumer markets, the practice of tax preferences for companies that work with small and medium-sized enterprises, as well as non-interference of the state in the internal affairs of private companies.
The economic stability of Germany is the main factor in attracting investment. A rigid legal system and a transparent transaction scheme protect foreign investments from the risks of fraud when changing property rights.
Germany - European logistics center
Germany owns about a quarter of the European logistics market, making it a significant player in economic growth in Europe.
Important components in the logistics infrastructure of Germany are the port of Hamburg, Europe's second in terms of container traffic, the largest container terminal in Europe of the port Bremerhaven and over 250 inland ports. The country has an extensive network of airports, of which 22 are international. One of them, Frankfurt Airport, ranks 1st in Europe in terms of the number of transported goods and 3rd place in terms of passenger traffic. Germany's road network has one of the highest densities per square kilometer in Europe, and the country's railways (37,860 km) would be nearly enough to travel around the globe. The German network of high-speed rail lines, on which the train can reach speeds of up to 300 km/h, is recognized as the eighth largest in the world.
Interesting fact. Germany is ranked number 1 out of 167 countries in the World Bank's Logistics Performance Index for the quality of its trade and transport infrastructure.
German companies are also among the global logistics leaders. The German company Deutsche Post DHL is considered the world's leading provider of logistics services. Deutsche Bahn is the operator of Europe's largest rail network and Lufthansa Cargo is one of the world's leading players in the air cargo market.
Belarus - Germany: economic cooperation
Traditionally Germany is one of the main investors in Belarus. Numerous foreign trade contracts and investment projects implemented using the funds of German banks with the insurance coverage Euler Hermes are aimed primarily at the modernization of Belarusian enterprises.
In 2019, Germany invested USD 139 million in Belarus, incl. direct investment - $ 83.9 million, direct on a net basis - $ 39.5 million.
Over 300 enterprises with German capital were registered in Belarus, as well as 90 representative offices of German firms. The largest of them: BASF, Siemens, Bosch, Bayer, Commerzbank, Bionorica, Fresenius. The most widely German capital is represented in the industrial sector, transport, agriculture, trade and food industry.
As of October 1, 2020, accumulated German investments amounted to USD 654.6 million. The largest German investors in Belarus: Henkel AG & Co. KGaA, Linde AG, Remondis AG & Co. KG, Carl Zeiss AG, Saria Bio-Industries AG & Co KG, Fielmann AG.
In recent years, a significant increase in the volume of Belarusian-German trade is seen. In 2017, the turnover increased by 25%, in 2018 it grew by another 16%. The unfavorable pricing environment for a number of backbone positions of Belarusian export to Germany in 2019 led to a slight decrease in Belarusian-German trade at the end of the year.
Dynamics of trade between Belarus and Germany in $ million
Export is based on:
- mineral products;
- products of timber and woodworking industry;
- base metals and products from them;
- machines, equipment, apparatus and instruments;
- chemical products;
- textiles and textile products; construction Mmterials;
- agricultural and food industry products.
Key import items:
- machinery, equipment, vehicles, machines and tools;
- chemical industry products;
- base metals and products from them;
- agricultural and food industry products;
- products of timber and woodworking industry;
- textiles and textile products
FEZ Grodnoinvest cooperation with Germany
2 companies with German capital are registered in FEZ Grodnoinvest: Belabedding Ltd., Haver BY Ltd. These are the representations of the famous German brands Fey & Co and Haver. Over the business activity, the companies invested $ 23.9 million, incl. $ 2.3 million in 2019.
In total, $ 88.3 million of foreign investments from Germany was attracted for projects implementation in FEZ Grodnoinvest. Considering foreign credit lines, the total volume of attracted investments in FEZ Grodnoinvest amounts to $ 284.5 million.
In 2019, the commodity turnover of FEZ Grodnoinvest residents with Germany amounted to U$ 36.4 million, including export of $ 5.0 million. FEZ Grodnoinvest residents export furniture and its parts to Germany, phthalic anhydride, sausage casings, as well as timber, glass containers, paper and cardboard, optical fibers and multiple fiber-optic, fuel wood, etc.
In order to develop cooperation with German business, the administration of FEZ Grodnoinvest actively participates in joint Belarusian-German business events, as well as organizes visits of German companies interested in establishing contacts with Belarusian enterprises and implementing investment projects in Grodno region.
In case of cooperation interest with German business circles, FEZ administration is ready to assist in establishing contacts and holding negotiations on the implementation of joint projects. Just contact us via email: email@example.com or call: +375 152 41-23-17.