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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHSK #0297/01 2471804
ZNR UUUUU ZZH
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FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 0449
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHSK/AMEMBASSY MINSK 0456

UNCLAS SECTION 01 OF 06 MINSK 000297 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: BELARUS WEEKLY POL/ECON REPORT - SEPTEMBER 4, 2009 
 
MINSK 00000297  001.2 OF 006 
 
 
¶1.  The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
 
- United Democratic Forces Finalized Procedures for Nominating 
Democratic Presidential Candidate (para. 2) 
- Supreme Court Upheld Registration Denial to the Party of 
Freedom and Progress (para. 3) 
- Belarusian Party of Working People Applied to Justice Ministry 
for Registration (para. 4) 
- Two Malady Front Activists Detained and Written up In Central 
Minsk (para. 5) 
- Opposition Activists Fined, Detained (para. 6) 
- Artyom Dubskiy Transferred to a Jail in Mogilyov (para. 7) 
- GOB Continues to Harass and Dismiss Opposition Activists 
(para. 8) 
- Minsk City Authorities Ban a Rally to Commemorate 
Disappearances (para. 9) 
 
New Life Church 
-------------- 
 
- Moral Support Shown to Defending New Life Community (para. 10) 
- Minsk City Government Steps up Its Confiscation Efforts (para. 
11) 
 
Nuclear Power Plant 
----------------- 
 
- GOB: NPP is Safe / Ecological Activists: No, It Is Not (para. 
12) 
- Atomstroiexport to Sign Cooperation Agreement with Belarus in 
October (para. 13) 
 
Russia-Belarus Relations 
--------------------- 
 
- Lukashenka Pleased with Frank Discussion and Full 
Understanding on Major Issues of Cooperation with Russia (para. 
14) 
 
IMF Mission 
---------- 
 
- IMF Concerned Over Belarus' Low Foreign Reserves (para. 15) 
- GOB Claims Economy on the Rise and Undertakes More Obligations 
(para. 16) 
- IMF Official: No Depreciation of BYR in the Foreseeable Future 
(para. 17) 
- IMF Mission Reaches Staff-Level Agreement on Second Review of 
SBA (para. 18) 
- IMF Mission Issues Statement Following Its Article IV 
Consultations with GOB (para. 19) 
 
Domestic Economy 
--------------- 
 
- Lukashenka Cautiously Praised His Government (para. 20) 
- Lukashenka: Belarus on a search for new routes of energy 
imports (para. 21) 
- Credit History Law Came Into Effect (para. 22) 
- Lukashenka Simplified Customs Procedures for FEZ Residents 
(para. 23) 
- Average Belarusian Household's Monthly Consumption $389 (para. 
24) 
 
Quote of the Week (para. 25) 
--------------------------- 
 
------------- 
Civil Society 
------------- 
 
¶2.  United Democratic Forces Finalized Procedures for Nominating 
Democratic Presidential Candidate 
 
Head of the United Democratic Forces (UDF) working group on 
drafting nomination procedures for a democratic presidential 
candidate, Lev Margolin, told Belapan on August 21 that the 
procedures are almost finished.  The nomination process will 
include a campaign period (October 2009 - April 2010) and 
primaries to be held in April 2010.  Ballots will be cast in 
large cities only.  Mr. Margolin expects to have 5-7 nomination 
hopefuls and about 100,000 voters.  If no hopeful secures more 
than 50% of the votes, UDF will hold a Congress of Democratic 
Forces.  The number of seats that each hopeful will be allowed 
to reserve for his supporters will be proportionate to the 
percentage of votes he/she receives in the primaries. 
 
 
MINSK 00000297  002.2 OF 006 
 
 
¶3. Supreme Court Upheld Registration Denial to the Party of 
Freedom and Progress 
 
According to independent media reports, on August 26, the 
Supreme Court denied the appeal of the Organizing Committee on 
the establishment of the Party of Freedom and Progress, which 
sought to overrule the registration denial issued by the Justice 
Ministry.  Supreme Court Judge Nikolai Bobkov opined that the 
Ministry had appropriate legal rights to deny registration 
because the Committee violated the procedures of party 
establishment and some of the submitted statements were false. 
The Chairman of the Committee Vladimir Novosyad told Belapan 
that the Court denial will not stop them from further political 
activities. 
 
¶4. Belarusian Party of Working People Applied to Justice 
Ministry for Registration 
 
The Chairman of the Belarusian Party of Working People (BPWP) 
Alexander Bukhvostov told Belapan August 24 that the party's 
Organizing Committee applied on the same day to the Justice 
Ministry for registration.  The party's founding congress, with 
65 delegates attending from all over the country, was held on 
July 26.  The BPWP was established when the Belarusian Party of 
Labor was liquidated by the Supreme Court in 2004 as a part of 
what Bukhvostov calls "a political order of the authorities." 
 
¶5. Two Malady Front Activists Detained and Written up In Central 
Minsk 
 
According to media reports, Malady Front activists Nikolai 
Demidenko and Anna Bunko were detained in central Minsk on 
August 23 after attaching a banner "Communism = Fascism" to the 
monument of Lenin on Independence Square in central Minsk.  They 
were taken to a nearby police station, written up for 
"anti-sanitation" and released to be tried under the 
Administrative Code some time in the future. 
 
¶6. Opposition Activists Fined, Detained 
 
On September 3, a Gorodok district court fined "Young Belarus" 
activist Taras Surganov $125 for displaying an opposition 
white-red-white flag on July 27.  Police detained Surganov 
during a demonstration on the occasion of the 19th anniversary 
of the Belarus' sovereignty declaration and charged him with 
violating mass events regulations.  In separate incidents in 
Brest, six Belarusian Social Democratic Party Gramada members 
were detained and questioned on September 1 for two hours over 
staging an unsanctioned demonstration to mark the 70th 
anniversary of the start of WWII.  All were released with no 
charge.  On August 30, police detained Malady Front activist 
Ivan Stasyuk for distributing printed materials and confiscated 
18 information bulletins titled "Human Rights."  Officers warned 
him over possible liabilities for disseminating illegal 
materials and released him two hours later with no charge. 
 
¶7. Artyom Dubskiy Transferred to a Jail in Mogilyov 
 
Malady Front (MF) press office informed the media on September 1 
that MF activist Artyom Dubskiy was transferred from pretrial 
holding facilities in Bobruisk to a minimum security jail in 
Mogilyov on August 28 to serve his one-year prison sentence. 
Dubskiy, a criminal "Case 14" participant, was convicted on July 
7, 2009, for violating his previous two-year partial house 
arrest on charges of participating in unsanctioned entrepreneur 
demonstrations on January 10, 2008. 
 
¶8. GOB Continues to Harass and Dismiss Opposition Activists 
 
Independent media reported on September 1 that a private company 
dismissed "Young Belarus" member Kasya Galitskaya from her job 
as a translator.  Galitskaya, a prominent youth movement 
activist, was fired after a Belarus KGB officer pressured her 
employer and threatened the company with repercussions.  She 
linked the dismissal with her political and civil society 
activities but refused to elaborate further.  As of September 1, 
2009 in a separate case, a Minsk high school principal 
repudiated a labor contract with Tatyana Ulanova, an astronomy 
teacher with 30+ years of professional experience who is also a 
member of the Conservative Christian Party.  Ulanova explained 
that a BKGB agent questioned her over participation in a 
campaign to promote the Belarusian language and forced the 
school administration to fire her.  Moreover, she claimed that 
security services had barred all Minsk-based schools from hiring 
her. 
 
¶9. Minsk City Authorities Ban a Rally to Commemorate 
Disappearances 
 
On September 3, Minsk city authorities denied an application for 
staging on September 16 a demonstration to mark the 10th 
anniversary since the disappearance of opposition politician 
Viktor Gonchar and his associate, businessman Anatoliy 
 
MINSK 00000297  003.2 OF 006 
 
 
Krasovskiy.  Fifty United Civic Party and other opposition 
members sought to rally in southeastern part of Minsk at an 
ostensible site of the disappearance.  Anatoliy Pavlov, UCP 
Minsk office Chairperson and one of the applicants, believes 
that authorities rejected the request, citing that the official 
application on UCP letterhead called for "a party's stamp," a 
"requirement" never voiced by officials before. 
 
-------------- 
New Life Church 
-------------- 
 
¶10. Moral Support Shown to Defending New Life Community 
 
The lawyer of the Full Gospel Church New Life, Sergei Lukanin, 
told Belapan news agency August 21 that their community started 
a marathon of prayers at 7:00pm on August 20 to last through 
9:00pm on August 21 for the purpose of keeping the building of 
the church, which the Minsk City Government has consistently 
tried to confiscate since October 2005.  He added that pastors 
of 50 evangelical churches have signed a letter to Lukashenka 
asking for his "immediate involvement to reestablish the rule of 
law and secure the constitutional rights of believers."  The 
Bishop of the Association of Full Gospel Christians and Chief 
Pastor of the New Life Church Vyacheslav Goncharenko met with EU 
Ambassadors in Minsk August 25 and was asked questions on the 
new land and temporary venue for church services as well as the 
amount of suggested compensation.  Pastor Goncharenko was 
hopeful that his meeting with the diplomats was evidence of the 
EU's commitment to the support of democratic values in Belarus, 
including freedom of religion, which, he believes, is heavily 
jeopardized in this country.  Belarusian democratic activists, 
including the leader of the For Freedom movement Alexander 
Milinkevich, the leader of Malady Front Dmitry Dashkevich, 
Chairman of the Party of the Belarusian Popular Front Lyavon 
Barshchevsky and others forwarded an open letter to the 
Presidential Administration, Minsk city government, National 
Assembly and the Council of Ministers urging them to stop the 
harassment of the church and to show solidarity with the 
community in their "spiritual struggle." 
 
¶11. Minsk City Government Steps up Its Confiscation Efforts 
 
According to media reports, representatives of the Minsk City 
Government came to Sergei Lukanin's residence August 24 and 
brought to his parents an Acceptance-Transfer Report on the 
controversial church building.  This formality enables the 
authorities to legally get a hold of the building, despite the 
fact that church representatives refused to sign the report and 
did not physically vacate the building.  On the same day two 
Emergency Situations Ministry officials tried to enter the 
church building to inspect fire safety issues but parishioners 
denied them entry.  On the same day the church sent 37.5 million 
Belarusian Rubles (BYR), which it received from the Minsk City 
Government for the confiscated building, back to the government. 
 Mr.  Lukanin called the amount of compensation ridiculous as it 
does not reimburse parishioners even a small fraction of the 
cost of turning an old cattle farm into a refurbished church 
building.  This was the third return of money to the city 
government over the last three years.  In addition, the Minsk 
City Government reportedly forwarded a formal letter to the EU 
Ambassadors in Belarus so that they see the authorities' 
perspective of the ongoing conflict. 
 
----------------- 
Nuclear Power Plant 
----------------- 
 
¶12. GOB: NPP is Safe / Ecological Activists: No, It Is Not 
 
According to press reports, August 25, Belarus' Ministry of 
Natural Resources and Environment Protection forwarded a short 
report to Austria, Lithuania, Latvia, Poland and Ukraine on the 
potential damage to the environment which might be caused by the 
construction and operation of a Nuclear Power Plant (NPP) in 
Belarus.  First Deputy Minister Alexander Apatski was quoted as 
saying at an international seminar in June that in the third 
quarter of 2009 the GOB will set the date and format for public 
hearings on ecological problems related to the construction and 
operation of the NPP.  Suggestions and recommendations voiced 
during the hearings will be taken into consideration as the 
final version of the report is drafted.  Nikolai Ulasevich, 
activist of the Belarusian Anti-nuclear Campaign, told Belapan 
news agency August 25 that ecological activists plan to stage a 
few protests and flash mobs in the Grodno region in late August 
to protest the potential construction of the NPP in this part of 
the country.  They also plan to voice their concerns at the 
public hearings.  On August 23, the activists along with 
ecologists and anarchists from Minsk, Grodno and Moscow staged 
an Anti-nuclear Day of Action in four villages located in the 
vicinity of the potential NPP site to express public protest 
against the construction of the plant.  The activists claimed 
that local residents oppose the construction as well. 
 
MINSK 00000297  004.2 OF 006 
 
 
 
¶13. Atomstroiexport to Sign Cooperation Agreement with Belarus 
in October 
 
According to the media, Russian nuclear company Atomstroiexport 
released a statement on September 2, saying that Russia and 
Belarus will likely sign an agreement in October 2009 on 
cooperation in the construction of the NPP in Belarus and 
endorse a construction contract in December 2009.  The company 
will act as the primary contractor, and the first unit of the 
NPP is scheduled to be opened in 2016. 
 
--------------------- 
Russia-Belarus Relations 
--------------------- 
 
¶14. Lukashenka Pleased with Frank Discussion and Full 
Understanding on Major Issues of Cooperation with Russia 
 
Following his three-hour meeting with Russian president Dmitry 
Medvedev August 27 Lukashenka said that they had never had such 
"open" and "very frank, in my spirit" discussions before, adding 
that "we have decided to intensify our meetings~ we are not 
allergic to each other."  Lukashenka's press service quoted him 
as saying: "I am almost convinced that we are not going to have 
any more of such sharp exacerbations (in mutual relations) ~ 
because neither Russians, nor we benefited from them."   He 
assured that major economic and political decisions will be made 
in the near future to "resolve problems" in bilateral relations. 
 According to Lukashenka, both presidents discussed in general 
terms Belarus' relations with the West and allegedly Medvedev 
understood Belarus' interests in the West, particularly in 
Europe.  According to an anonymous source of RIA Novosti news 
agency, the recognition of Abkhazia and South Ossetia was not on 
the agenda. 
 
Lukashenka assured that Belarus "cannot but join" the agreement 
of the Collective Security Treaty Organization (CSTO) members on 
the establishment of the Collective Rapid Deployment Forces 
(CRDF) because Russia and Belarus ostensibly initiated the 
agreement as a  frame document and "we have nothing to worry 
about here."  In addition, he promised Belarus will take office 
as CSTO chairman in the next term because Belarus "did not work 
as a chairman for six month."  Lukashenka claimed he secured 
Medvedev's support in an effort to intensify modernization of 
Belarus' armed forces and anti-aircraft units.  Belarusian and 
Russian leaders allegedly agreed that Russia will open a credit 
line in 2010 to construct the Nuclear Power Plant (NPP) in 
Belarus.  He also assured that "Belarus will have no problems 
with payment for the natural gas" but did not elaborate any 
further.  The parties also discussed customs tariffs on oil, 
Russia's loan to Belarus and joint steps to mitigate the effects 
of the global crisis.  "We decided that our governments will 
negotiate and resolve all these problems in September.  That was 
a promise of the President of Russia," asserted Lukashenka.  "We 
agreed to intensify our relation within the framework of the 
Union of Belarus and Russia~. I believe by December (time period 
of Moscow session of the Supreme State Council of the Union 
State) we will have some results" concluded Lukashenka. 
 
---------- 
IMF Mission 
---------- 
 
¶15. IMF Concerned Over Belarus' Low Foreign Reserves 
 
According to media reports, the visiting Director of the IMF's 
European Department, Marek Belka, told Prime Minister Sergei 
Sidorsky August 25 that "the problem of low foreign reserves~ 
that may threaten the country's stability" is of major concern 
in the short term.  Mr. Belka nevertheless noted that "by and 
large we are satisfied with the general trend of the Belarusian 
government's economic policy."  He stressed that the current IMF 
mission will conduct a second review of Belarus' compliance with 
the $3.52 billion SBA and will focus mostly on short-term 
issues.  The mission's other goal is to hold regular Article 4 
consultations with the GOB on Belarus' long-term economic 
prospects. 
 
¶16. GOB Claims Economy on the Rise and Undertakes More 
Obligations 
 
Prime Minister Sergei Sidorsky told the visiting Director of the 
IMF's European Department August 25 that during this past spring 
and summer the Belarusian economy was on a steady rise. 
Everything manufactured during this time has been sold without 
delay and inventories of unsold products manufactured earlier 
are reducing gradually.  The country lost a lot of traditional 
markets but found new ones in 13 countries.  Despite 
considerable budget cuts, the government has allegedly secured 
economic growth, more investment and an inflation rate as low as 
0.3-0.4% per month.  On August 26, the IMF's official website 
posted the Letter of Intent signed by Prime Minister Sergei 
 
MINSK 00000297  005.2 OF 006 
 
 
Sidorsky and the Chairman of the Board of the National Bank (NB) 
Pyotr Prokopovich.  The letter lists obligations, to which the 
GOB committed itself in order to comply with the IMF's $3.52 
billion Stand-By Arrangement (SBA.)  The GOB expects 2009 GDP to 
decrease 3% and inflation to not exceed 11%.  The government 
urges Belarusian banks to offer interest of no less than 21.6% 
on deposits of individuals in Belarusian rubles (BYR).  It plans 
to cancel two special and one local tax on retail sales and to 
reduce the profit tax from 24% to 20%.  VAT will be increased 
from 18% to 22% to compensate for lower revenues.  The GOB plans 
to reduce subsidies paid to monopoly suppliers of communal 
services provided to households.  The government is also on a 
search for strategic investors, who, market permitting, would be 
willing to purchase a controlling interest in two state-owned 
banks Belpromstroibank and Belinveestbank as well as minority 
stocks in Belarusbank and Belagroprombank.  In addition, it will 
submit to the parliament the privatization bill before September 
¶30.  Besides, all businesses with minority stocks owned by the 
state will be exempt from meeting all statistical indices, 
including the ones on the volume of production and employment. 
The rights of the state in such businesses will be exactly the 
same as the ones enjoyed by other minority shareholders. 
 
¶17. IMF Official: No Depreciation of BYR in the Foreseeable 
Future 
 
Following his talks with the GOB officials August 26, the IMF's 
Director of European Department Mark Belka opined that the 
existing mechanism of establishing the exchange rate of Belarus' 
national currency towards the world's currencies is correct as 
it is sufficiently flexible and ensures necessary stability. 
"To put it directly, there will be no depreciation (of the 
national currency).  At least not in the foreseeable future," 
asserted the IMF official.  He also noted that the new 
Belarus-IMF cooperation program, if adopted, will focus on 
long-term structural reforms and strengthening the country's 
economic potential in the post-crisis time. 
 
 
¶18. IMF Mission Reaches Staff-Level Agreement on Second Review 
of SBA 
 
According to numerous media reports, following the completion of 
the IMF mission to Belarus, August 18 - September 2, head of the 
IMF's Mission to Belarus Chris Jarvis issued a statement 
September 2 to summarize discussions on the second review under 
the Stand-By Arrangement (SBA) with Belarus.  He informed that 
"the IMF mission today reached staff-level agreement with the 
Belarusian authorities on the conclusion of the second review 
under the SBA.  The authorities' Letter of Intent will now be 
submitted to IMF Management with a view to allowing the IMF 
Executive Board to consider the completion of the second review 
of the arrangement soon after the annual IMF-World Bank meetings 
in October.  The completion of this review would release a 
tranche of SDR 437.93 (about $683 million)."  The IMF official 
also underscored that "macroeconomic and financial policies in 
Belarus are on track.  All end-June quantitative performance 
criteria have been met and the authorities have been making good 
progress in meeting structural targets under the program, 
including the preparation of the draft decree on establishing of 
a Privatization Agency."  According to the statement, "the 
mission and the authorities agreed on a tightening of credit 
policy, which will control domestic demand and improve Belarus's 
external position." The IMF allegedly supports the GOB's efforts 
under the program claiming that its "current exchange rate and 
fiscal policies appear to be consistent with the objectives of 
the program." 
 
¶19. IMF Mission Issues Statement Following Its Article 4 
Consultations with GOB 
 
Following its Article 4 Consultations with the GOB, the IMF 
Mission posted on its website August 26 the Statement to suggest 
long-term economic policies, which can secure Belarus' high and 
sustainable growth in the years to come.  The Statement urged 
the GOB to curtail  lending programs because they "boosted 
domestic demand, which increased the trade deficit and has led 
to the loss of reserves in recent weeks;" defer public wage 
increases, "while providing targeted social assistance to shield 
the poorest from the impact of the crisis;" continue tax reforms 
and raise utility tariffs toward cost recovery levels.  The 
Statement strongly suggested that Belarus carry out structural 
reforms, which "can focus on yielding state control to market 
forces, and steadfastly pushing ahead with privatization."  It 
listed concrete steps that the GOB should take to reduce state 
intervention in the economy.  The key item is "an ambitious and 
transparent privatization agenda that is open to foreign 
investors."  This includes "the enactment of a modern 
Privatization Law and establishment of a Privatization Agency." 
The statement ended with a suggestion to "eventually" move to a 
more flexible exchange rate regime. 
 
---------------- 
 
MINSK 00000297  006.2 OF 006 
 
 
Domestic Economy 
---------------- 
 
¶20. Lukashenka Cautiously Praised His Government 
 
During his working trip to the Vitebsk region on August 20 
Lukashenka expressed cautious optimism over the GOB's efforts to 
sell huge inventories of unsold products manufactured by 
crisis-hit industrial enterprises.  He pledged to keep a close 
eye on the government's progress and said he is ready to get rid 
of unsuccessful government and industry officials in no time. 
 
¶21. Lukashenka: Belarus on a search for new routes of energy 
imports 
 
Lukashenka told the press during his working trip to the Gomel 
region on September 2 that the GOB is looking for alternative 
routes to import energy as Belarus "cannot depend on a single 
supplier, for instance, Russia, as we used to have problems." 
He kept saying that "we will have alternative ways if it is not 
lucrative [to import energy from Russia]" and that the GOB is 
considering participation in the Odessa-Brody pipeline project 
in Ukraine.  Lukashenka praised diversification of energy 
supplies, mentioning the Eastern Partnership Program with its 
"lucrative energy transit projects." 
 
¶22. Credit History Law Came Into Effect 
 
According to the presidential press service, the bill on credit 
history signed into law by Lukashenka last November came into 
effect on August 21. Under the law, starting as of January 1, 
2009 the National Bank has kept credit history files of all 
credit/loan takers and can provide credit history information, 
for a fee, to any and all private inquirers (including foreign 
ones) given that the individual credit subject grants 
permission.  Information is provided to government agencies for 
free and presumably no permission is needed. 
 
¶23. Lukashenka Simplified Customs Procedures for FEZ Residents 
 
On August 25, Lukashenka signed edict 430, which amended his 
other two edicts signed in 2005 and 2006 to simplify customs 
procedures for residents of the Free Economic Zones (FEZ). 
According to the edict, samples of raw materials and components 
used for laboratory tests in the course of a continuous 
production process will be exempt from customs clearance.  The 
edict also provides for simpler clearance of goods used by the 
FEZ residents for constructing and renovating real estate.  The 
edict is expected to facilitate implementation by FEZ residents 
of large investment projects and boost their exports. 
 
¶24. Average Belarusian Household's Monthly Consumption $389 
 
According to data posted by the National Statistics Committee on 
August 26, a Belarusian households' average monthly consumption 
through June totaled the equivalent of $389. In Belarusian 
rubles (BYR) the year-on-year increase was 12.4% but in US 
dollars the households reduced their consumption considerably 
because of the 20% plus depreciation of the BYR this past 
January.  According to the same statistics, an average household 
spent monthly $160 on food products, $8.5 on alcohol, $128 on 
non-food products, $93 on utility and other services.  The share 
of households with incomes below the minimum subsistence level 
was 4% in cities, 3.2% in small towns and 6.2% in villages.  A 
year ago the figures were 4.4%, 3.6% and 6.1% respectively. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶25. On August 27, Russia's daily Izvestia published on its 
front-page an interview with Lukashenka by the First Deputy 
General Director of ITAR-TASS news agency Mikhail Gusman from 
August 13.  Speaking about the 2006 presidential election 
Lukashenka confessed to rigging the election results. "Yes, we 
did rig it. I ordered not to have a number of 93% but something 
like 80%... I cannot remember~ because 90% plus cannot be 
accepted psychologically. But that was true."  The Chairperson 
of the Central Election Commission Lidia Yermoshina dismissed 
Lukashenka's revelations on August 27 arguing that the CEC "is 
not aware" of any rigging. 
MILLER