VZCZCXRO8704
RR RUEHIK
DE RUEHSK #0345/01 2861550
ZNR UUUUU ZZH
R 131550Z OCT 09
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 0508
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHSK/AMEMBASSY MINSK 0516

UNCLAS SECTION 01 OF 04 MINSK 000345 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: BELARUS BI-WEEKLY POL/ECON REPORT - OCTOBER 9, 2009 
 
MINSK 00000345  001.3 OF 004 
 
 
¶1. (U) The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
- IISEPS Survey: Despite Growing Pro-European Sentiments, 
Lukashenka Favored In Elections (para. 2) 
- GOB Continues to Try to Block Registered Parties from Getting 
Out Their Message (para. 3) 
- Opposition Youth to Run a Joint Get Out the Vote Campaign but 
See It as a Up Hill Battle (para. 4) 
- GOB Continues to Limit Citizens Access to Independent Media 
(para. 5) 
- GOB Claims Private and State Media Have Equal Playing Field 
(para. 6) 
- Opposition Leaders Delayed From Leaving the Country (para. 7) 
 
Economy 
------- 
- Russia's Flip Flop on the $500M Could Spell Trouble for 
Belarus with the IMF (para. 8) 
- Price Caps to Be Abolished, But Informal Controls Appear to 
Continue (para. 9) 
- Lukashenka: State Will Not Withdraw From the Economy (para. 10) 
- GOB Must Maintain the Social Contract:  Full Employment and 
Subsidies of the Utilities (para. 11) 
- Lukashenka Is Private Sector Friendly - For a Year - To Combat 
Collapsing Export Statistics (para. 12) 
- Foreign Direct Investment on the Decline (para. 13) 
- Belarusians Buying Hard Currency As a Cushion Against the 
Unknown (para. 14) 
- Belarus'  Commodity Trade, Yet Another Sector Where Imports 
Exceed Exports (para. 15) 
 
International Security 
---------------------- 
- Russia, Belarus Conclude "Successful" Military Exercises Zapad 
2009 (para. 16) 
 
Religion 
-------- 
- Russian Orthodox Patriarch Hails Good Relations with GOB, But 
Surprised About the Pope (para. 17) 
 
Quote of the Week (para. 18) 
--------------------------- 
 
------------- 
Civil Society 
------------- 
 
¶2. (U) IISEPS Survey: Despite Growing Pro-European Sentiments, 
Lukashenka Favored In Elections 
 
The September survey of the Vilnius-based Independent Institute 
for Social, Economic and Political Studies (IISEPS) showed that 
pro-European sentiments are growing in Belarus;  44 percent 
surveyed support EU membership while 39 percent support a merger 
with Russia.  Nevertheless, 71 percent have a "good attitude" 
towards Russia, and 46.8 percent support the GOB recognizing 
South Ossetia and Abkhazia.  If the elections were held 
tomorrow, Lukashenka would receive 39.4 percent of the votes, 
Alyaksandr Milinkevich 3.4 percent, and Alyaksandr Kazulin 2 
percent.  34.1 percent of those interviewed believe that the 
current regime represents the interests of "officials and 
bureaucrats," while 25 percent and 12 percent, respectively, 
believe the regime cares for "the people like me" and "poor and 
socially vulnerable" persons.  Approximately 45 percent express 
dissatisfaction with their living standards, in particular, 
rising housing, educational, healthcare, and groceries costs. 
43 percent blame Lukashenka, 8 percent Russia and 4 percent the 
West for the poor economic situation, and 47 percent expressed 
hope that foreign investment would improve the situation. 
Nevertheless, 62 percent credit Lukashenka "for maintaining 
stability in society" and 37 percent for "cracking down on 
corruption." 
 
¶3. (SBU) GOB Continues to Try to Block Registered Parties from 
Getting Out Their Message 
 
On September 30, police detained United Civic Party (UCP) leader 
Anatoliy Lebedko, opposition Communist Party leader Sergey 
Kalyakin and some of their colleagues for distributing in the 
center of Minsk copies of the United Democratic Forces' (UDF) 
anti-crisis platform.  Their materials were confiscated, and 
after being held for a couple of hours, they were released 
without charges.  Lebedko told Charge that the police who drove 
him home told him he should have waited until October 1 to 
handout the pamphlets because the police would have been 
pre-occupied with crowd control for the UEFA Cup soccer match 
 
MINSK 00000345  002.3 OF 004 
 
 
between Everton and BETA.  Nevertheless, Lebedko said that as it 
turned out most of his colleagues handing out pamphlets on the 
streets throughout Belarus had not been detained.  He said that 
UDF had initially appealed to multiple city governments for 
permission to set up 450 booths to conduct the information 
campaign, but only two booths had been approved. 
 
¶4. (SBU) Opposition Youth to Run a Joint Get Out the Vote 
Campaign but See It as a Up Hill Battle 
 
During their meeting with EUR/ACE Daniel Rosenblum in Minsk on 
October 2, the opposition youth leaders, who have come together 
in a common coalition, expressed their plans to conduct "youth 
mobilization" campaigns in the run up to the next presidential 
elections, which could be scheduled as early as November 2010 
but no later than February 2011.  The representatives of the 
Right Alliance NGO, the Belarusian Popular Front Youth, the 
Young Belarus, the United Civic Party's Young Democrats and the 
Young Christian Democrats stated that despite the economic 
turbulences and "high level of discontent in the society," the 
regime's "safety factor" of controlling people through the 
economy continued.  They complained that Lukashenka has not yet 
introduced real economic reforms, including privatization.  The 
youth leaders called upon the USG to set out clear timeframes by 
which the GOB must meet its democratic obligations.  They also 
argued that foreign lending to Belarus should be conditioned to 
political reform and not only to offset an economic crisis as 
that would just perpetuate the behavior of the current regime. 
 
¶5. (U)  GOB Continues to Limit Citizens Access to Independent 
Media 
 
On September 30, the Ministry of Information warned the private 
radio station Avtoradio that it would be shut down if it 
continued to air an international, political, and cultural news 
and music show produced jointly with European Radio.  On October 
1, Avtoradio discontinued broadcasting the show.  Journalists 
operating for external media reporting into Belarus on Belarus; 
e.g., Belsat and Radio Racya, continue to receive warnings from 
the prosecutor's office for operating without accreditation. 
Journalist who receive three warnings can be fined.  There have 
been thirteen warnings issued against Belarusian independent 
journalists since the enactment of the new media law on February 
8, 2009.  For the journalist it is a catch twenty two as they 
are consistently denied accreditation.  In a separate incident, 
the state network Belsoyuzpechat denied a request from the 
independent bi-weekly Narodnaya Volya to increase its 
circulation from twice a week to three times a week claiming 
that it was "not possible to distribute additional copies due to 
the massive output of [other] periodicals" on that specific day 
of the week. 
 
¶6. (U) GOB Claims Private and State Media Have Equal Playing 
Field 
 
An international team of media experts visited Belarus from 
September 21-24.  In their concluding statement they urged the 
GOB to ensure the rights of independent journalists, ensure fair 
economic conditions and equal access to information for both 
independent and state-owned outlets, and strengthen the 
transparency of the accreditation process.  They also called on 
the GOB to remove distribution and other economic restrictions 
against the independent media outlets.  On September 22, 
Nataliya Petkevich, First Deputy Head of the Presidential 
Administration, told the media team that the GOB would 
"liberalize" the procedure for frequency allocation for the 
electronic media outlets "in the near future."  Moreover, she 
praised the media situation in Belarus as "improving" be it 
slow.  However, she refused to acknowledge that the state and 
independent media do not enjoy equal conditions in Belarus. 
 
¶7. (U) Opposition Leaders Delayed From Leaving the Country 
 
On October 4, Belarusian Popular Front Chairperson Alyaksey 
Yanukevich was searched for two and a half hours at Minsk 
airport.  As a result, he missed his flight to London and had to 
travel the next day.  On October 7, Belarus border guards at the 
crossing point on the road to Vilnius searched United Civic 
Party leader Anatoliy Lebedko for two hours before allowing to 
cross into Lithuania. 
 
------- 
Economy 
------- 
 
¶8. (SBU) Russia's Flip Flop on the $500M Could Spell Trouble for 
Belarus with the IMF 
 
Russian Finance Minister Kudrin told reporters at the IMF-World 
Bank meeting in Istanbul on October 5 that his government will 
not issue the final $500-million tranche of the $2-billion loan 
to Belarus, but will help the GOB receive additional financing 
 
MINSK 00000345  003.3 OF 004 
 
 
from the IMF and the Eurasian Economic Community anti-crisis 
fund, the latter which has yet to be established.  Belarus 
Finance Minister Kharkovets said that the GOB will continue to 
talk with Russia regarding the final $500 million tranche. 
(Note:  According to the IMF Res Rep, Belarus has a $1 billion 
dollar financing gap for 2009, and for the Stand By Agreement to 
stay on track, in addition to the $200M World Bank DPL and EC 
$300M MFA, Belarus must receive $500M by the end of the year 
from Russia or identify a second source of funds.  End Note) 
 
¶9. (SBU) Price Caps to Be Abolished, But Informal Controls 
Appear to Continue 
 
The Ministry of Economy sources have told the media that the 
government will soon announce that it will abolish price caps on 
most products as October 28 or 29.   The Ministry sites the 
measure as "another step" towards price liberalization. 
However, 50 product categories will be excluded, including 
medicines, food staples, and products for children, as well as 
to goods that are imported for production purposes in Belarus. 
Commenting on the resolution, a Ministry of Economy official 
warned companies against prices hikes implying that companies 
should police themselves versus being guided by market 
indicators.  Recently, the Mayor of Minsk said companies should 
focus on selling Belarusian products.  The Regional Manager for 
Coca Cola told Charge that many local companies were reluctant 
to continue to stock Coca Cola's imported juices, implying that 
the Mayor's statement was being taken as a signal by local 
outlets as to what was acceptable behavior to the government. 
 
¶10. (U) Lukashenka: State Will Not Withdraw From the Economy 
 
During his interview with the Russian press on October 2, 
Lukashenka declared that the state should not "withdraw from the 
economy."   Moreover, he blamed private companies for the trade 
dispute between Belarus and Russia claiming that private 
companies "never worry about the people and the state" but only 
want to  "pocket huge revenues."  Nevertheless, this did not 
stop Lukashenka from urging private businesses to help sell off 
the huge inventories that have accumulated over the last six to 
nine months at most state enterprises. 
 
¶11. (U) GOB Must Maintain the Social Contract:  Full Employment 
and Subsidies of the Utilities 
 
Deputy PM Semashko told the media on October 2 that the GOB's 
top economic priorities are to develop the manufacturing sector 
and to secure decent living standards for people.  "However hard 
it may be today, people must have a job," underscored Semashko, 
adding that households had to only pay 32% of the cost of 
natural gas with the government subsidizing the rest. 
 
¶12. (U) Lukashenka Is Private Sector Friendly - For a Year - To 
Combat Collapsing Export Statistics 
 
On September 25, a Presidential decree extended preferential 
conditions through July 1, 2010 to entrepreneurs engaged in 
exporting Belarus-made goods.  The decree relaxed taxation 
procedures and simplified the handling of foreign currency 
proceeds. 
 
¶13. (U) Foreign Direct Investment on the Decline 
 
A source in the National Bank told the Prime-TASS news agency 
that net inflows of foreign direct investment (FDI) in Belarus 
dropped 4.7% y-o-y for January-June 2009 to $1.155 billion, with 
$898.5 million or 63% of total FDI coming from Russia. 
 
¶14. (U) Belarusians Buying Hard Currency As a Cushion Against 
the Unknown 
 
According to September 29 media reports, the National Bank (NB) 
registered a 17.07 percent depreciation of the Belarusian ruble 
against the basket of currencies of Belarus' main trade partners 
in real terms for January-August 2009.  The Belarusian ruble 
depreciated 13.22 percent against the Russian ruble, 21.09 
percent against the Ukrainian hryvna, 22.11 percent against the 
euro, and 19.17 percent against the USD in the same period. 
According to the NB, from January-July 2009, Belarus residents 
purchased from the Belarusian banks $3.893 billion in foreign 
currency cash, 22.8% in the same period in 2008.  (Note:  Hard 
currency is a historical safe haven for Belarusians in time of 
economic uncertainty.  End Note) 
 
¶15. (U) Belarus'  Commodity Trade, Yet Another Sector Where 
Imports Exceed Exports 
 
Belarus' foreign commodity trade deficit reached $4.7 billion in 
January-August 2009, compared to $3.7 billion in the same period 
in 2008.  Exports dropped 44.5 percent y-o-y and imports 34.7 
percent over this period.  Belarus' exports to Russia, its major 
trading partner, fell by 46 percent y-o-y while its imports from 
 
MINSK 00000345  004.3 OF 004 
 
 
Russia decreased only by 39.2 percent. 
 
---------------------- 
International Security 
---------------------- 
 
¶16. (U) Russia, Belarus Conclude "Successful" Military Exercises 
Zapad 2009 
 
Russian President Medvedev stated on September 28 that the 
Belarus-Russia joint military drills Zapad 2009 were not 
"threatening anyone" and were "of a defensive nature."  He 
furthermore praised "high-level" organization of the exercises 
that keep the armed forces "in proper shape."  Attending with 
President Lukashenka the last day of maneuvers in Belarus, 
Medvedev assessed the drills as "successful"  and said similar 
large-scale, international military exercises would be held 
alternately in Belarus and Russia every two years  to help both 
states enhance a "reliable" defense system for the Union State. 
Lukashenka echoed his Medvedev's remarks 
 
-------- 
Religion 
-------- 
 
¶17. (U) Russian Orthodox Patriarch Hails GOB's Relations with 
the Church, But Surprised About the Pope 
 
Russian Orthodox Patriarch Kirill I paid his first official 
visit to Belarus on September 25-28.  Lukashenka wholeheartedly 
welcomed the Patriarch on September 25, citing that the GOB 
"will always support not only the Orthodox Church" but also his 
"patriarchal service."  The President emphasized that religious 
laws in Belarus recognize "the Church's determining role in the 
development of spiritual, cultural, and state traditions" and 
added that "the state cannot exist without the Church."  The 
Patriarch concurred and said that Belarus remained Russia's 
"most reliable ally."  He argued that "the Patriarch of all Rus 
is not the Patriarch of Russia only as Holy Rus spreads to other 
states" which made "our people united by a system of values." 
The Patriarch attributed Belarus facing political and other 
challenges to its location on the "turbulent" borders between 
European civilizations.  Kirill lauded "peace" and lack of 
tension between various Christian denominations in Belarus, in 
particular, "fruitful cooperation" between the Roman Catholic 
and Orthodox Churches.  Additionally, he welcomed a dialogue 
between the Christians and the Moslems, explaining that "people 
of Islamic guidance may be closer by their faith than Western 
people who are secularized to the core."  Unexpectedly for the 
GOB, the Patriarch dismissed speculations that he might be 
meeting with Pope Benedict XVI in Belarus and claimed that he 
was "unaware" of the GOB's efforts to arrange such a meeting. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶18. (U) Answering questions of Russian journalists in Minsk on 
October 2 Lukashenka said: 
 
"We held these (military) exercise (West 2009) not with 
Americans, not with NATO but with our Russians.  And only an 
idiot can say after that that Lukashenka turned to the West or 
some other directions and abandoned Russia." 
SCANLAN