VZCZCXRO6285
RR RUEHAST
DE RUEHSK #0911/01 2331336
ZNR UUUUU ZZH
R 211336Z AUG 06
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 4954
INFO RUCNOSC/ORGANIZATION FOR SECURITY COOPERATION IN EUROPE
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK

UNCLAS SECTION 01 OF 03 MINSK 000911 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON EPET EAGR ENRG KTDB BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - August 18, 2006 
 
REF: Minsk 692 
 
MINSK 00000911  001.2 OF 003 
 
 
¶1.  (U) The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
INTERNATIONAL RELATIONS 
----------------------- 
- Lukashenko Stipulates Eurasian Customs Union (para. 2) 
- Belarus and Ukraine Discuss Cooperation (para. 3) 
- Lukashenko Greets Indian, South Korean Leaders (para. 4) 
 
LOCAL ELECTIONS 
--------------- 
- GOB Confirms Date of Local Elections (para. 5) 
 
CIVIL SOCIETY 
------------- 
- Neo-Nazi Group Denies Connection to Dummy Explosive (para. 6) 
- Opposition Youths Detained in Vitebsk on Solidarity Day (para. 7) 
- Security Services Oversee Grain Harvest (para. 8) 
 
TRADE AND INVESTMENT 
-------------------- 
- DuPont Ponders Opening a Representative Office in Minsk (para. 9) 
 
DOMESTIC ECONOMICS 
------------------ 
- Belarus' GDP Up Ten Percent on Year (para. 10) 
- National Bank: 18 Percent Growth in Money Supply (para. 11) 
- GOB Reports Hiring 411,000, Dismissing 399,000 (para. 12) 
 
- QUOTE OF THE WEEK (para. 13) 
 
 
----------------------- 
International Relations 
----------------------- 
 
¶2.    (U) Lukashenko Stipulates Customs Union, Meets with Putin 
 
On August 17, the heads of state of the Eurasian Economic Community 
(EURASEC) concluded their summit in the Russian resort city of 
Sochi.  The EURASEC member states formally tasked Belarus, 
Kazakhstan and Russia with designing a customs union within EURASEC 
and signed a document formalizing Uzbekistan's accession to the 
Collective Security Treaty Organization.  President Lukashenko 
predicted the customs union could be created within 18 months, but 
stated that Belarus would join the union only on condition that 
EURASEC member states enjoyed equal conditions.  Lukashenko also 
asserted that the establishment of a customs union within EURASEC 
would not prevent the member states from joining the World Trade 
Organization.  On August 19, Presidents Putin and Lukashenko met at 
Putin's residence in Sochi to discuss the Union State of Belarus 
and Russia.  After the meeting, both presidents reported they have 
more to discuss. 
 
¶3. (U) Belarus and Ukraine Discuss Cooperation 
 
On August 15, Belarusian Ambassador to Ukraine Valentin Velichko 
met with Ukrainian First Deputy Prime Minister Mykola Azarov to 
discuss bilateral economic and political relations.  Azarov 
declared Ukraine is ready for constructive political dialog with 
Belarus and is still interested in the integration of the members 
states of the Commonwealth of Independent States despite Ukraine's 
efforts to join the EU.  He noted that Belarusian-Ukrainian trade 
is projected to total more than USD two billion in 2006.  Azarov 
also called for a bilateral agreement to liberalize border 
crossings for employees of the Chernobyl nuclear plant who reside 
in Ukraine's northeastern city of Slavutych and for continuing 
repairs of the containment structures around Chernobyl's exploded 
reactor. 
 
 
¶4.  (U) Lukashenko Greets Indian, South Korean Leaders 
 
On August 15, President Lukashenko sent greetings to the heads of 
state of India and South Korea on their national holidays. 
President Lukashenko reportedly expressed hope Belarus and South 
Korea would continue what Lukashenko described as their "mutually 
beneficial" cooperation.  In his message to Indian President Abdul 
Kalam on the anniversary of India's Independence, Lukashenko 
described Indian-Belarusian political and economic cooperation as 
"fruitful."  On August 16, the two countries signed an agreement to 
resume sales of Belarusian potash to India. 
 
--------------- 
Local Elections 
 
MINSK 00000911  002.2 OF 003 
 
 
--------------- 
 
¶5.  (U) GOB Confirms Date of Local Elections 
 
On August 16, Central Election Commission Head Lidiya Yermoshina 
confirmed elections for local municipal councils will be held 
January 14, 2007.  She ruled out an early election date, observing 
that holding elections before Christmas would likely reduce voter 
turnout.  Although President Lukashenko had tentatively endorsed 
scheduling the elections for January, opposition leaders announced 
last month that they were preparing for an early election scenario. 
Approximately 24,000 seats on more than 1,600 municipal councils 
will be open to challenge. 
 
------------- 
Civil Society 
------------- 
 
¶6.  (U) Neo-Nazi Group Denies Connection to Dummy Explosive 
 
On August 17, representatives of the neo-Nazi Russian National 
Unity (RNE) group denied planting a dummy explosive device at the 
entrance to the opposition Belarusian Popular Front (BPF)'s 
headquarters in central Minsk.  On August 16, BPF members 
discovered the fake explosive adorned with the RNE emblem, which 
resembles a swastika, and filled with RNE leaflets.  A week 
earlier, the independent newspaper "Vitebsk Kuryer" received a 
letter in which RNE leaders threatened to drive the paper out of 
business.  In June, the leader of the Vitebsk chapter of the United 
Civic Party received a similar letter from RNE. 
 
¶7.  (U) "Partnership" Election Observers Appeal Prison Sentences 
 
On August 14, the defense teams of imprisoned independent election 
observers Nikolai Astreiko and Timofei Dranchuk filed appeals with 
the Minsk City Court.  Dranchuk's lawyers seek to overturn the 
conviction, while those of Astreiko merely petitioned the court to 
mitigate their client's sentence.  On August 4, Judge Leonid 
Yasinovich sentenced Astreiko to two years and Dranchuk to one year 
in prison for allegedly operating an unregistered organization 
called "Partnership," which gained prominence for its impartial 
observation of Belarus' 2004 parliamentary elections and 
referendum.   According to attorneys for both Dranchuk and 
Astreiko, Judge Yasinovich downgraded the government's charges 
without commensurately shortening their sentences.  The Minsk City 
Court has two months to consider the appeals. 
 
¶8.  (U) Opposition Youths Detained in Vitebsk on Solidarity Day 
 
On August 16, police detained ten youths in the eastern city of 
Gomel and twelve in the northern city of Vitebsk for participating 
in a candle-lighting ceremony held as part of the monthly 
"Solidarity Day" commemoration.  Several dozen people had assembled 
near a monument to St. Cyril of Turov in Gomel and dispersed a few 
minutes later.  However, plainclothes police officers brought ten 
activists to the district police station to record their identities 
and released them without charges an hour later.  In Vitebsk, a 
dozen activists gathered at the Cross of St. Euphrosyne and lit 
candles.  Police recorded the identities of the twelve youths whom 
authorities detained but released them thirty minutes later after 
the officers took down their passport data. The remaining youths 
had their ID documents checked on the street.  Opposition activists 
in Belarus have been observing Solidarity Day since September 16, 
2005, which marked the sixth anniversary of the disappearance of 
opposition leaders Viktor Gonchar and Anatoliy Krasovskiy. 
 
¶9.  (U) Security Services Oversee Grain Harvest 
 
On August 13, the Belarusian Ministry of Interior Affairs (MVD) 
reported its personnel are overseeing the ongoing grain harvest at 
local farms throughout Belarus.  The MVD has ordered police to 
conduct random inspections at facilities where reaped grain, 
fertilizers, fuel, lubricants and equipment are stored, and inspect 
vehicles involved in harvesting.  Moreover, police also escort 
grain combines on their way to and from fields to prevent road 
accidents involving the harvesters, and post warning signs.  Top 
MVD officials purportedly hold weekly conferences to evaluate the 
effectiveness of police officers in assisting with the harvest. 
 
-------------------- 
Trade and Investment 
-------------------- 
 
¶10.  (SBU) DuPont Ponders Opening a Representative Office in Minsk 
 
DuPont's Eastern Europe Regional Director John Shmorhun told 
Pol/Econoffs his company may open an office in Minsk in the near 
future.  According to Shmorhun, DuPont already sells more than USD 
10 million worth of products in Belarus in each of several sectors, 
 
MINSK 00000911  003.2 OF 003 
 
 
including industrial paints, insulation and refrigerants.  In 
addition to expanding sales of these areas, DuPont hopes to tap the 
local market for agricultural inputs (hybrid seeds and 
fertilizers), road construction (geotextiles and bitumen additives) 
and technologies for oil and gas refineries. 
 
------------------ 
Domestic Economics 
------------------ 
 
¶10.  (U) Belarus' GDP Up Ten Percent on Year 
 
On August 16, Belarus' Ministry of Statistics claimed Gross 
Domestic Product (GDP) reached USD 19.6 billion as of August 1, 
2006, up 10.1 percent from the same point last year.  In 2005, 
Belarus' GDP reportedly grew 9.2 percent on the year USD. 
 
¶11.  (U) National Bank Reports 18.6 Percent Growth in Money Supply 
 
On August 17, the National Bank of Belarus (NBB) reported the 
Belarusian money supply grew by 18.6 percent in the first six 
months of 2006 to 10,200 billion rubles as of July 1, while 
consumer prices rose by 3.1 percent in the period.  The amount of 
cash in circulation increased by 23.3 percent to 2.5 trillion 
rubles and accounted for 24.4 percent of the money supply on July 
1, down from 25.2 percent on July 1, 2005.  The amount of non-cash 
money on July 1, 2006 totaled 7.7 trillion rubles, or 75.6 percent 
of the money supply. 
 
¶12.  (U) GOB Reports Hiring 411,000, Dismissing 399,000 
 
On August 17, Belarus' Ministry of Statistics for Analysis reported 
government-owned organizations and companies hired 411,000 people 
and dismissed 399,000 in the first six months of 2006.  Almost 80 
percent of those dismissed reportedly left voluntarily.  Seven 
percent were fired for absenteeism and 1.7 percent as a result of 
lay offs.  Almost 7,500 were dismissed for alcohol intoxication at 
work, ostensibly an 11 percent decrease from last year. 
 
----------------- 
Quote of the Week 
----------------- 
 
¶13.  (U) In a display of cognitive dissonance reminiscent of the 
Cold War, pro-government Communist Party of Belarus (CPB) General 
Secretary Georgiy Atamanov offered the state daily newspaper 
 
SIPDIS 
"Respublika" the following observation regarding his recent meeting 
with Pol/Econ Chief and Poloff (reftel): 
 
"Unlike the opposition which is spending most of its time abroad, 
the pro-Government communists know the real state of things in 
Belarus and that is why it is more effective to deal with them than 
with the opposition.  American diplomats are very educated 
specialists who know Russian very well.  Therefore, deep down in 
their souls they understand that the opposition lies to them but 
their ideological and political position does not allow them to 
look for the truth." 
 
Moore