Berlin  - Business and political leaders from Germany and the Arab world gathered in Berlin for a major conference with German Economy Minister Michael Glos stepping up his warning about the threat posed to the world economy by spiralling oil prices.

Speaking at the opening of the 11th German-Arab Economics Forum, Glos said that the rapid acceleration in energy prices was at present the "greatest challenge" facing global economic growth, which has already been under pressure as a result of the international credit crunch.

Now with inflation surging around the world on the back of higher energy and food costs fears are growing of rising interest rates.

"It cannot be in the interests of a functioning world economy, if the oil price rises quickly and of the adjustments which have to be repeatedly and quickly taken into account in price changes," Glos told the conference.

The latest German-Arab business conference also came against the backdrop of booming economic relationships between Germany and Arab nations many of which have been attempting to use revenue generated by the surge in oil prices to diversify their economies and upgrade their infrastructures.

The three-day conference also includes a series of workshops such as on infrastructure development in the construction, transport and logistics sectors as well financial services, renewable energy along with education and vocational training.

The forum is also to mount discussion sessions on private equity know-how as promoting Arab-German businesswomen dialogue.

However, Arab business leaders attending the conference also said that measures need to be taken to improve the process of granting visas to Germany.

Oman's Minister for Commerce and Industry Maqbool bin Ali bin Sultan told the conference that Germany already plays a key role in the modernization of his nation's infrastructure and development. But Maqbool, who is also to speak the forum's special session on the petrochemical industry, went on to say that ties between Germany and Arab nations, including Oman, represented "considerable opportunities for expanding."

Oman's ties with Germany, said Maqbool, were "a model of Arab German relations."

Indeed, despite the rapid-fire growth in Germany's economic relations with Arab nations, Europe's biggest economy ties to the Middle East still only represent a relatively minor proportion of its total global economic interests.

After growing by 9.6 per cent in 2007, German exports to the Middle East charged ahead by about 12 per cent in the first four months of the year.

Reflecting the high oil price, German imports from the Middle East jumped by 47 per cent since the start of the year.

Oman is the partner country for this year's German-Arab business forum which Maqbool said was "a sign of considerable confidence in his country."

Also attending the conference was a delegation from Iraq lead by the nation's Minister for Industry, Fauzi Al-Hariri, who told the forum that despite the great challenges and tensions facing his country it had managed to achieve "positive developments."

This included Baghdad's drive to establish a private sector in the country.

Fauzi is also slated to speak at one of the forum's special sessions, which is on doing business in Iraq. (dpa)