East German boom town breaks populist, backward stereotypes

With higher unemployment rates than western Germany and support for the anti-immigration Alternative for Germany (AfD) party reaching 20 per cent, the country’s former communist east has often been associated with economic decline and xenophobia.

But some cities in eastern Germany have emerged as economic bright spots where populist politicians are finding it hard to gain ground.

Take the city of Jena in Thuringia state — population 100,000, unemployment rate 6.5 per cent.

Long known as a “lighthouse” of the region, the city boasts a flourishing high-tech sector and a strong optical technology sector that even the communist years didn’t extinguish.

Just a short walk from the colourful facades of the market square, a white building stands out, bearing the blue letters “Jenoptik”.

The company’s chief executive Michael Mertin, who employs 3,500 people, said: “The combination of high-tech, well-trained employees and internationalisation have certainly been a factor of success”.

The company traces its beginnings to the optical giant Carl Zeiss, part of which was nationalised during the communist era.

Jenoptik grew out of the nationalised firm after German reunification in 1990.

Today, it makes and sells optic systems and laser equipment across the world.

During a late-winter visit, the company was playing host to two South Koreans in town to learn how to use its high-precision laser technology that cuts car parts.

Jenoptik is not alone in success in Jena, which now boasts some 5,000 enterprises.

A long-standing university has also regained popularity, and students make up a quarter of the population.

“Jena has managed to overcome crises, because the technology companies of the city target a range of markets with varied products and are strong in exports,” said Wilfried Roepke, who heads the city’s economic promotion agency Jena Wirtschaft (Jena Economy).

That makes the city one of a few exceptions in eastern Germany, even if it’s not the only success story today.

Mercedes-Benz is investing millions of euros in Ludwigsfeld in Brandenburg state that surrounds Berlin, while BMW has built an ultra-modern factory in Leipzig.

Dresden has its Silicon Saxony of IT firms, and in Potsdam, the Babelsberg studios is again attracting international movie producers.

Despite the growing opportunities, “eastern Germany often doesn’t have such a positive image, there are still prejudices,” said Roepke.

That extends to recruitment, where potential employees often have to first overcome an “initial reticence” stemming from the stereotype of eastern Germany as unattractive and backward.

A psychological barrier still exists mainly among Germans themselves, said Mertin, who hails from the western city of Cologne.

From abroad, “Germany is viewed as a single strong entity,” he said.

And there are signs the situation is improving, with eastern regions having recently begun seeing a net gain in population, according to a Berlin research institute.

But the struggle continues to close the economic gap with the west.

At 8.6 per cent, the unemployment rate in the east remains three percentage points higher than in the west, while gross output per inhabitant in 2015 was nearly 30 per cent less than in western Germany.

According to the Jenoptik boss, the main challenge is the absence of “big companies that have the potential of becoming international by themselves”.

None of Germany’s 30 biggest listed enterprises are based in the east.

Given the economic divide, much of eastern Germany is fertile ground for the populist party AfD, which accuses foreigners of stealing German jobs and faults globalisation for moving industry abroad.

“The economic situation in Jena is relatively good, but 30 kilometres to the east, the situation is far worse,” said Denny Jankowski, the AfD’s candidate for Jena in the September general elections.

He sees the gap between the east and west as wide as ever, and complains that many easterners are trapped in low-paying jobs.

The AfD has also been railing against a record influx of around a million asylum-seekers in 2015, playing on fears that Germany would not be able to integrate the newcomers who make up about 1 per cent of the country’s population.

Better performing cities like Jena also suffer from the double-edged sword of rising rents as the population grows.

There is a “kind of fear that people won’t be able to maintain their standard of living”, said Mertin, but he insisted that “in every change, there is an opportunity.”

Opinion polls suggest that one in five voters in Jena’s state of Thuringia in favour of the AfD, while the national average is half that at around 10 per cent.

For Roepke, economic success alone is not enough to steer the population away from populist arguments.

But he is hopeful that “when the economic situation leads a large part of the population to be satisfied with his or her situation, then there would be less of a need to look for scapegoats or simplistic solutions.

source : gulfnews