VZCZCXRO3934
RR RUEHAST RUEHDBU RUEHFL RUEHLA RUEHMRE RUEHPOD RUEHROV RUEHSR
DE RUEHSK #0391/01 1340800
ZNR UUUUU ZZH
R 140800Z MAY 07
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 5996
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 000391 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON EPET ENRG BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - MAY 11, 2007 
 
 
¶1.  The following are brief items of interest compiled by Embassy 
Minsk. 
 
TABLE OF CONTENTS 
 
International Relations 
----------------------- 
 
- EC Office in Minsk Not Sign of Softness on GOB (para. 2) 
- Lukashenko Ratifies Kyoto Protocol (para. 3) 
 
Civil Society 
------------- 
 
- Supreme Court Liquidates Prominent NGO (para. 4) 
- Entrepreneurship Forum Organizers Denied Venue (para. 5) 
- Civil Society Activist Detained in Northern Belarus (para. 6) 
 
International Trade and Investment 
---------------------------------- 
 
- Beltransgaz Amends Its Charter for Gazprom (para. 7) 
- Belarus' Cigarette Imports Up 20.5 Percent (para. 8) 
 
Domestic Economy 
---------------- 
 
- Final Consumption Exceeds 72 Percent of 2006 GDP (para. 9) 
- Domestic Goods Capture 76 Percent of Retail Sales 
 (para. 10) 
 
Society 
------- 
 
- Independent Campaign to Save Historic Grodno (para. 11) 
 
- QUOTE OF THE WEEK (para. 12) 
 
INTERNATIONAL RELATIONS 
----------------------- 
 
¶2.  EC Office in Minsk Not Sign of Softness on GOB 
 
Upon his arrival in Minsk on May 7, European Commission Delegation 
to Ukraine and Belarus First Counselor Jean-Eric Holzapfel told 
Belarusian independent media that the opening of the European 
Commission's Minsk office would not prompt the European Union to 
ease its political stance on the GOB.  He described the GOB's 
decision to grant permission for the opening the office as a 
positive step but also as a normal step under the Vienna Convention. 
 Holzapfel also said that the Belarusian authorities should take 
other positive steps, including the release of Belarus' political 
prisoners.  He added that the potential exclusion of Belarus from 
the EU's Generalized System of Preferences was not a sanction but a 
result of systematic violations of trade union rights in the 
country.   During his visit, Holzapfel met with GOB State Border 
Troops Committee Chief Igor Rachkovskiy and delivered a speech at 
Belarusian State University on the 50th anniversary of the Treaty of 
Rome. 
 
¶3.  Lukashenko Ratifies Kyoto Protocol 
 
On May 4, President Lukashenko signed an ordinance to ratify the 
Kyoto Protocol.  The GOB has committed itself to cut greenhouse 
emissions to 117.2 million tons, or 92 percent of the 1990 benchmark 
year.  The GOB reportedly plans to trade up to 30 million tons worth 
of emission quotas annually, and to participate in international 
projects to reduce greenhouse gas emissions. 
 
CIVIL SOCIETY 
------------- 
 
¶4.  Supreme Court Liquidates Prominent NGO 
 
On May 4, independent news agencies reported that Belarus' Supreme 
Court ordered the liquidation of the prominent NGO "Belarusian 
Literature Fund" for an alleged series of violations of the law 
since its registration in 1992.  NGO Chairperson Aleksandr Danilchik 
informed the media that he received a subpoena on the eve of the 
court hearing, and had no time to study the case.  He also noted 
that court's decision reflects the GOB's approach in stifling 
opposition writers' organizations and their activities.  The Supreme 
Court judge announced that the NGO will not be able to challenge the 
verdict and has to reimburse expenses related to the hearing. 
 
¶5.  Entrepreneurship Forum Organizers Denied Venue 
 
On May 6, small business association Perspektiva leader Anatoliy 
Shumchenko reported to independent media that the hotel 
administration in the northern city of Vitebsk broke its agreement 
with the association to host a forum of entrepreneurs at the hotel's 
 
MINSK 00000391  002 OF 003 
 
 
conference room.  Shumchenko said that in spite of an advanced 
payment the administration explained its refusal due to some 
technical difficulties and alleged flooding.  The organization was 
previously denied premises at the Vitebsk Trade Union Training 
Center in April.  However, Shumchenko expressed hope that the forum 
will take place in Vitebsk in the near future. 
 
¶6.  Civil Society Activist Detained in Northern Belarus 
 
On May 7, civil society and youth activist Aleksey Trubkin was 
detained briefly in the northern city of Novopolotsk for allegedly 
posting stickers containing "anti-governmental language".  Police 
officers searched Trubkin's personal belongings; however, they did 
not find any stickers.  A BKGB officer reportedly questioned the 
activist about his studies in Poland and activities of youth 
organizations in Belarus. 
 
INTERNATIONAL TRADE AND INVESTMENT 
---------------------------------- 
 
¶7.  Beltransgaz Amends Its Charter for Gazprom 
 
On May 4, a Beltransgaz supervisory council member told independent 
media that the company's special general meeting amended its charter 
to comply with a new law on economic entities and joint-venture 
agreement with Russia's Gazprom.  Beltransgaz, currently one hundred 
percent state owned, has to establish a 50-50 joint venture with 
Gazprom.  The GOB wants the joint venture registered in Belarus and 
all potential disputes to be resolved according to Belarusian law. 
Under a protocol signed by Russia and Belarus on December 31, 2006, 
corporate governance at Beltransgaz may start only after Gazprom 
acquires its 50 percent stake, not scheduled until mid-2010. 
 
¶8.  Belarus' Cigarette Imports Up 20.5 Percent 
 
On May 4, Belarus' Ministry of Statistics reported that Belarusian 
January-February 2007 cigarette imports jumped 20.5 percent on the 
year to 312.4 million cigarettes.  Approximately 139.5 million 
cigarettes were imported from the CIS, up 12.3 percent, and 172.9 
million units from non-CIS states, up 28.1 percent.  Average 
contract import prices rose 7.6 percent on the year in the first two 
months to U.S. USD 20 per 1,000 cigarettes.  The GOB has set a 2007 
quota on cigarette imports at 1.5 billion cigarettes.  Belarus' 
annual consumption, including imports, stands between 16 billion and 
18 billion cigarettes. 
 
DOMESTIC ECONOMY 
---------------- 
 
¶9.  Final Consumption Exceeds 72 Percent of 2006 GDP 
 
On May 5, sources in Belarus' Ministry of Statistics reported to 
independent media that the GOB has completed its GDP analysis based 
on disposal of incomes.  According to the analysis, final 
consumption expenditures accounted for 72.3 percent of GDP in 2006. 
The share of final consumption expenditures of households and 
non-profit organizations edged up to 51 percent from 50.7 percent 
and from 1.3 percent to 1.4 percent, respectively, between 2005 and 
2006 while that of public agencies declined to 19.9 percent from 
20.8 percent.  The share of gross savings increased to 30.4 percent 
in 2006 from 28.4 percent in 2005.  The contribution of net exports 
(exports minus imports) stood at negative 4.3 percent. In 2005, the 
figure was 0.7 percent. In terms of income sources, labor 
compensation, including social security transfers, accounted for 
47.8 percent of GDP in 2006, compared with 46.1 percent in 2005. The 
share of gross economic income and gross mixed incomes declined to 
34.5 percent from 35.7 percent.  Net production and import taxes 
[taxes minus subsidies] accounted for 17.7 percent in 2006, down 
from 18.2 percent in 2005. 
 
¶10.  Domestic Goods Capture 76 Percent of Retail Sales 
 
Citing sources close to the GOB, on May 7, independent media 
reported that the share of domestic goods in Belarus' retail 
turnover made up 76.2 percent in the first quarter.  Sales of 
Belarusian foods accounted for 84.8 percent of retail sales, and 
non-foods 64.7 percent.  Belarus' January-March retail turnover, 
including the public catering sector, jumped 20.7 percent on the 
year to USD 3.7 billion.  Private companies' share of total retail 
turnover stood at 81.3 percent, up 0.7 percentage points on the year 
for January-March, state companies 15.4 percent, down 1 percentage 
point, while the share of foreign companies totaled 3.3 percent, up 
0.3 percentage points. 
 
SOCIETY 
------- 
 
¶11.  Independent Campaign to Save Historic Grodno 
 
On May 6, independent media reported that in the western city of 
Grodno representatives of local intelligentsia and civil society 
 
MINSK 00000391  003 OF 003 
 
 
activists have launched a campaign in protest of the renovation of 
the historic old part of the city.  Campaign activist Ales Zalevskiy 
told reporters that in the morning groups of activists assemble at 
the buildings that the authorities plan to demolish, and stay until 
the end of the workday to mobilize the public and inform the media 
in case construction workers start pulling the buildings down. 
Also, members of the intelligentsia are collecting signatures to 
initiate a local referendum and to appeal to the prosecutor's office 
plans to demolish and reconstruct the historic old town. 
 
QUOTE OF THE WEEK 
----------------- 
 
¶12.  During his Victory Day address on May 9, President Lukashenko 
offered insight on GOB ideology and tolerance: 
 
"We have the right to be proud that Belarus protects and respects 
memorials at the places of battles and the thousands of monuments in 
cities and villages.  That is the guarantee of the fact that our 
people unlike certain 'democratic' states will never support the 
ideology of human hatred." 
 
MOORE