THIS is a busy time for Milan Hupcej, minister-counsellor and head of the Economic Section of the Czech embassy in Bangkok. His duties are to look after trade, investments and development cooperation between the Czech Republic and Thailand, as well as Cambodia, Laos, and Myanmar. His schedule promises to get even more hectic as preparations for the coming ASEAN Economic Cooperation (AEC) intensify. The recent positive political changes in Myanmar present great opportunities for Czech businesses.
The Czech Republic has an excellent man for the job in Mr. Hupcej, an experienced diplomat and no stranger to Asia. During the interview he was relaxed and confident but is clearly excited about the possibilities for his country to play an active role in this dynamic region.
The Czech Republic is a highly developed industrial country in the centre of Europe, with a population of about 10.5 million and an area of 78,866 square kilometers. It excels in the production of goods ranging from military trainer jet aircraft, passenger cars, machinery and weapons to fine crystal and, of course, beer. Apart from beer, all these items and more are imported into Thailand.
“I have spent many years as a diplomat abroad. I can read and write Korean, so I was posted on the Korean peninsula for more than 10 years, first in North Korea for four years from the late 1980s. Then in 1996, I spent six years in South Korea as head of the diplomatic mission there.
“When I returned to headquarters in Prague I worked in the Asian Department as head of the Far East Division. In 2004 I went abroad again, this time to Shanghai. I was a consul general in the People’s Republic of China until 2008. I learned some Chinese, finding some of the words similar to Korean, and I can speak what could be described as ‘survival’ Chinese,” said Mr. Hupcej.
After returning again to Prague he worked for three years at the policy department of the Foreign Ministry, and just last year, on July 1, came to Bangkok.
Mr. Hupcej said relations between the Czech Republic and the four countries he represents in the region are at varying levels and stages.
“Thailand is, of course, our main partner and that’s why we are here. Our second quite important partner is Cambodia. The Czech Republic has ten priority countries in terms of developmental assistance. Cambodia is one of the two in Asia, with the second being Mongolia. Most of the other countries are in Africa.”
Mr. Hupcej said the Czech government is giving financial support for different types of projects, including in health care and social security in Cambodia. “Cambodia is also important for us because His Majesty King Norodom Sihamony studied in Czechoslovakia. He went there in 1962 and stayed until the mid-1970s. He still speaks fluent Czech and his connection with our country is very strong,” said Mr. Hupcej.
“As for Laos, we don’t have any substantial projects there. Our trade is very limited, less than one million US dollars a year both ways. We are trying to maintain relations there with people who studied in Czechoslovakia and who can speak the Czech language. We also provide scholarships for young people and bring them to the Czech Republic to study.
“In the beginning of November this year, the 9th Asia-Europe Meeting (ASEM) will be held. More than 50 heads of government from Europe and Asia are expected to arrive in Vientiane, probably including the Czech President Vaclav Klaus. So we think that this will also be a boost for our bilateral relations with Laos,” Mr. Hupcej said.
“Concerning Myanmar, we are looking forward to the changes that are now taking place. In the past Czechoslovakia maintained very extensive economic relations with this country. For example, in early 1980s the Czechoslovak government granted a big loan to the government of what was then Burma, and Czech companies built businesses such as factories to make tires, tractors and fuel injection systems for engines – also a sugar mill, brewery and hydro-power station. These are still operating, so we would like to take part in their modernization.
“With the new situation in Myanmar we are quite optimistic and hope it will continue to progress on the way to democracy. We would like to use this opportunity to also develop economic relations. That’s why I am organizing a trade mission of Czech companies to Myanmar sometime in October. We consider Myanmar to have big potential for economic cooperation,” Mr. Hupcej said.
“Thailand is a very important partner for us. Last year exports from the Czech Republic to Thailand amounted to over US$135 million, making Thailand our second biggest market in ASEAN after Singapore.
“Many of our exports to Thailand are related to machinery, including different kinds of pumps, bearings and machine tools. Another significant group is agricultural products, like dairy, including a large quantity of dried milk.
“But probably the most important exports from the Czech Republic to Thailand are military products. These include guns, mostly pistols, especially the CZ-75 model. This gun is very popular with Thai provincial police departments, many of which have been equipped with it.
“There are some other Czech guns in use here. Recently CZ (Ceská Zbrojovka) introduced an assault rifle and a small semi-automatic gun called the ‘Scorpion,’ which is mostly used by special forces or anti-terrorist units.
“Recently, there was a presentation of CZ products in Thailand which received a good response. There is a big chance that the Royal Thai Army or special forces will make some new purchases. CZ is paying a lot of attention to Thailand because this could be quite a good market for them. They are also selling a lot of products in other Asian countries.
“For the Defense & Security 2012 exhibition held in Bangkok in March, we brought 12 Czech companies who offered to the Thai armed forces various military equipment such as radar, surveillance systems and one for detection of chemical weapons,” said Mr Hupcej. He added that in the mid-1990s his country sold Thailand 36 L-39 Albatrosses, a Czech-made high-performance military jet trainer aircraft. They are currently undergoing a general overhaul, which is being done by the Czech companies involved.”
Mr. Hupcej noted that Škoda cars are one of the up-and-coming Czech-made products which are gaining a lot of recognition and respect worldwide, but unfortunately they are not well known in Thailand. “They are not selling in the volumes we would like. However, they are popular in other Asian countries like China, Singapore and Malaysia, and also in Australia, New Zealand and in Europe.
“There are a few reasons for the sluggish sales in Thailand, including a lack of advertizing and high import taxes. This makes the cars lose their competitiveness. It is hard to penetrate the Thai market due to very strong protection measures,” Mr. Hupcej said.
On the other side, about half of Thailand’s exports to the Czech Republic are electronics and computer parts, followed by machinery parts and natural products like rubber and foods including tuna and dried fruits.
The trade balance is about 10 to one in Thailand’s favour, according to official statistics which value Thai exports at US$1.346 billion and Czech exports at US$135.5 million. But Mr. Hupcej said this is “only on paper.” He explained: “Although the trade balance looks negative for the Czechs, our economy is very much based on manufacturing. A lot of parts are imported into the Czech Republic to use for producing various items, including computers and electronic devices like televisions, which are later exported back to Thailand or to other countries.”
Mr. Hupcej noted that there are several distributors of Czech crystal brands such as Preciosa and Moser in Thailand. Preciosa is the world leader in the production of cut crystal.
Mr. Hupcej said he knows of two Czech companies operating in Thailand. One is Tegamo (Thailand) Co., Ltd., a modern and rapidly growing international company that has been recycling industrial waste in Europe since 1999. The other is BTL Medical Technologies (Thailand) Ltd. which manufacture medical equipment and other related goods.
“We also have in Thailand several Czech tourist agencies. There are about 35,000 Czech tourists visiting Thailand every year and they come here mainly through these agencies. There is very big potential for Thai tourism in the Czech Republic, but the number is still below those of Czech tourists coming here.
“However, over the last year the numbers have been going up, partly due to a top Thai romantic comedy series called ‘Kon Rak Luang Jai’ (‘Tricky Love’), which was filmed in Prague and starred the popular actors Janie Tienphosuwan and Theeradeth “Ken” Wongpuapan.
“The series attracted many Thais to Prague. This year the number of visa applicants is three times higher than in the same period last year. The majority of Thai tourists are well off, so it could be a very good for our economy.
“The Czech land is famous for its natural beauty and historical places. It is time to have direct flights between Bangkok and Prague, maybe by Thai Airways International. There has been some negotiation already and we hope it might happen sometime next year. It would bring more Czech tourists here and Thais to our country.”
Mr. Hupcej said that in general Thai business people are quite good partners although sometimes difficult to negotiate with at first. A bigger problem has been working out a formal economic agreement with the government.
“We have prepared an agreement on economic cooperation and the negotiations were concluded seven years ago, but it is still not signed due to events on the Thai side. We hope that this could happen this year.”