VZCZCXRO9319
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHSK #0322/01 2611644
ZNR UUUUU ZZH
R 181644Z SEP 09
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 0482
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHSK/AMEMBASSY MINSK 0489

UNCLAS SECTION 01 OF 03 MINSK 000322 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: BELARUS WEEKLY POL/ECON REPORT - SEPTEMBER 18, 2009 
 
MINSK 00000322  001.2 OF 003 
 
 
¶1.  The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
 
- GOB, Lithuania Defer Agreement on Simplified Border Crossing 
(para. 2) 
- GOB Continues to Harass and Fine Opposition Activists (para. 3) 
- Riot Police Disperse an Opposition Demonstration Yet Again 
(para. 4) 
 
Economy 
--------- 
 
- Customs Union to Fine-tune Distribution of Import Incomes 
(para. 5) 
- IMF Issued $448.7 Million Worth of SDR's to Belarus (para. 6) 
- Issuance of WB loan Will Depend on Belarus' Compliance With 
Its IMF SBA (para. 7) 
- WB and IFC Praise GOB for Reforming Economy But Make it Clear 
"There is Still Room For Improvement" (para. 8) 
- Through-August GDP Down 0.5 Percent Year-On-Year (para. 9) 
- Finance Ministry Posted 1.3 Percent Budget Deficit Through 
July (para. 10) 
- Vice Premier: Less Inspections, But They Are More Efficient 
(para. 11) 
- Lukashenka Streamlines Granting State Support to the Needy 
(para. 12) 
 
International Security 
-------------------------- 
- Joint Military Exercise Starts in Belarus (para. 13) 
 
 
Quote of the Week (para. 14) 
--------------------------- 
 
------------- 
Civil Society 
------------- 
 
2 GOB, Lithuania Defer Agreement on Simplified Border Crossing 
 
Chiefs of the Belarus and Lithuania border agencies signed a 
border agreement.  The document outlines procedures for 
maintenance of the shared border, movement of goods, economic 
and other activities at the border zone and resolution of 
incidents.  According to the Lithuanian MFA spokesperson, 
Lithuania and GOB did not endorse an agreement on visa-free 
travel between the two countries within the 50-kilometer border 
zone because the GOB ostensibly "requested additional time to 
finalize internal procedures."   (BelaPAN, Delfi.lt, September 
16) 
 
¶3. GOB Continues to Harass and Fine Opposition Activists 
 
A Vitebsk district court fined on September 15 Sergey Kovalenko, 
local Conservative Christian Party member, $375 for allegedly 
displaying an opposition white-red-white flag.  Police detained 
and questioned Kovalenko and his associate Taras Surgan, a Young 
Belarus activist, on September 14.  In a separate incident on 
September 14, a Minsk district court fined "European Belarus" 
civil campaign activist Maksim Sergiyets $250 for participating 
in a September 9 rally against the Russian-Belarusian military 
exercises named Zapad-2009.  In another case in Mozyr, civil 
society activist Pavel Nozdrya was fined $37 for allegedly 
violating military registration procedures.  A local draft 
office claimed that Nozdrya failed to timely notify them that he 
had changed a place of his employment. 
 
¶4. Riot Police Disperse an Opposition Demonstration Yet Again 
 
Riot police dispersed yet another unauthorized opposition rally, 
this one marking the 10th anniversary of high-profile 
disappearance in downtown Minsk on September 16.  EMBOFFs 
observed that as in a similar incident on September 9, law 
enforcement officers surrounded the protesters 10 minutes after 
they had assembled at the site and shoved about 35 of them into 
police buses.  They also impeded journalists taking pictures of 
the dispersal.  All the protesters were reportedly released with 
no charges after a three-hour detention; however, many of the 
activists report being assaulted, harassed, threatened with 
physical abuse, and forced to give fingerprints.  In a separate 
incident in Gomel, police detained 16 local activists on their 
way to a rally venue on September 16.  Ten were charged with 
holding an unsanctioned demonstration and released three hours 
later.  They maintained that they would appeal their detention 
to the prosecutor's office. 
 
---------- 
 
MINSK 00000322  002.2 OF 003 
 
 
Economy 
---------- 
 
¶5. Customs Union to Fine-tune Distribution of Import Incomes 
 
According to media reports, the Executive Secretary of the 
Commission of the Belarus, Russia and Kazakhstan Customs Union 
Sergei Glaziev stated on September 14 that import incomes of the 
Union will be distributed based on macroeconomic criteria that 
have yet to be identified.  The three member-states will 
reportedly work independently in their national currencies but 
later funds will be deposited into a single account.  Export 
duties, however, will be contributed directly to the budget. 
The Union expects to reach an agreement on a unified tariff by 
November of this year with the goal of it taking effect on 
January 1, 2010.  The single Customs Code is expected to come 
into effect on July 1, 2010. Customs law of the Union will 
include both the Customs Code and decisions of the Commission. 
 
¶6. IMF Issued $448.7 Million Worth of Special Drawing Rights to 
Belarus 
 
Natalya Kolyadina, IMF Resident Representative in Minsk, told 
Prime-TASS news agency on September 11 that the IMF has assigned 
$448.7 million worth of Special Drawing Rights (SDR) to Belarus 
beyond the Stand-by Arrangement (SBA) lending program. The 
intent is to boost Belarus foreign reserves during the global 
financial crisis. 
 
¶7. Issuance of WB loan Will Depend on Belarus' Compliance With 
Its IMF SBA 
 
The World Bank Resident Representative in Belarus, Ivan Velev, 
told the journalists on September 11 that the WB Board of 
Directors will consider a $200 million Development Policy Loan 
(DPL) for Belarus in late autumn 2009.  Should Belarus fall 
short of the targets set in the IMF's Stand-by Arrangement 
(SBA), "it would slow the DPL project," the official added. 
 
¶8. WB and IFC Praise GOB for Reforming Economy But Make it Clear 
"There is Still Room For Improvement" 
 
Neil Gregory, Acting Director of the WB-IFC Indicators and 
Analysis praised the GOB's steps to streamline business 
conditions and encouraged the GOB to continue reforms. He added 
that the GOB has committed to further progress in providing 
access to loans, protecting investors, boosting foreign trade 
and liberalizing its taxation policy.  At the same event, the 
International Finance Corporation's Representative in Belarus 
Craig Bell noted that approximately 51% of small and medium 
businesses in Belarus had not seen any improvements in 
administrative procedures, 37% noted improvements, and 12% 
described procedures as "more difficult." 
 
¶9. GDP Registers First Decline Since 1995 
 
The National Statistics Committee informed the media on 
September 11 that Belarus' GDP through August was $30.8 billion, 
which marked 0.5 percent decrease year-on-year, the first 
decline registered since 1995.  Last year the economy registered 
a 10% GDP increase. 
 
¶10. Finance Ministry Posted 1.3 Percent Budget Deficit Through 
July 
 
A source in the Finance Ministry told Prime-TASS news agency on 
September 15 that the national budget deficit for the period of 
January-July 2009 was at 1.3% of the GDP.  The national budget 
reflects spending and revenues of the central administration, 
while the consolidated budget also includes local budgets. 
Lukashenka signed a decree on May 28 adjusting the budget 
parameters for 2009, increasing the foreign debt limit from $2 
billion to $8 billion.  He also approved a zero-deficit budget 
for 2009, reducing revenues by almost $3 billion to $16.7 
billion, and expenditures by $4 billion to $16 billion. 
 
¶11. Vice Premier: Fewer, But More Efficient Business Inspections 
 
According to media reports, Deputy PM Andrey Kobyakov stated 
that the 2009 suspension of business inspections and temporary 
changes in scheduling procedures have reduced the actual number 
of inspections while increasing their efficiency. The tax 
agencies cut their inspections by 44.5% and the State Control 
Committee by 33.5%. 
 
¶12. Lukashenka Streamlines Granting State Support to the Needy 
 
According to the Presidential press service, Lukashenka approved 
new procedures for granting state support to individuals in the 
areas of social allowances and non-cash housing subsidies.  The 
change, to come in to effect on January 1, 2010, will streamline 
and simplify regulations for filing applications and allocating 
state support.  It will also raise the minimum criterion of need 
 
MINSK 00000322  003.2 OF 003 
 
 
required for receiving aid. 
 
¶13. Joint Military Exercise Starts in Belarus 
 
The Zapad-2009 (West-2009) joint Russian-Belarusian military 
exercise kicked off in Belarus September 18 to test both 
countries' capabilities to ensure their Union State's security 
and readiness to repel a possible military aggression. The 
exercise will continue until September 29 and will involve 
12,600 Russian, Belarusian and Kazakh servicemen. 
 
 
----------------- 
Quote of the Week 
----------------- 
 
¶14. Answering questions of journalists in Vilnius on September 
16, Lukashenka referred to Europeans' negative attitude towards 
Belarus' electoral code, process and elections, and offered: 
 
"Pay money - $15 million.  This is not big money for you. 
Organize elections in Belarus and their results will be legally 
binding to me." 
PUTZ