VZCZCXRO3119
RR RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVL #0905/01 2980912
ZNR UUUUU ZZH
R 240912Z OCT 08
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC 2994
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 VILNIUS 000905 
 
AMEMBASSY MINSK SENDS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON ENRG BO
SUBJECT: BELARUS WEEKLY POL/ECON REPORT - October 24, 2008 
 
¶1.  The following are brief items of interest compiled by Embassy 
Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
 
- Popular Front Celebrates 20th Anniversary (para. 2) 
- Democratic Seniors Denied Registration (para. 3) 
- Independent Election Observer Fined (para. 4) 
- Opposition Youth Leader Detained/Interrogated (para. 5) 
 
Domestic Economy 
---------------- 
 
- Lukashenko Wants to Make Belarusian Banks Attractive to Foreigners 
(para. 6) 
- National Bank Optimistic about Foreign Investment in Belarusian 
Banks (para. 7) 
- Russian Embassy Skeptical about Large Russian Investment in 
Belarus (para. 8) 
- Large Banking Investments Postponed Indefinitely (para. 9) 
- Russia to Issue Stabilization Loan to Belarus (para. 10) 
- Belarus Requests Financial Assistance from the IMF (para. 11) 
 
Quote of the Week (para. 12) 
----------------- 
 
------------- 
Civil Society 
------------- 
 
¶2. Popular Front Celebrates 20th Anniversary 
 
On October 18, the Belarusian Popular Front held a commemorative 
event at its headquarters to mark the 20th anniversary of its 
founding.  The Minsk city authorities and the Presidential 
Administration's Property Management department denied the party 
rental of any large premises in town on October 16.  BPF members 
reported that vandals broke its office's windows the night of 
October 18 and posted a sticker with the emblem of the unregistered 
Russian National Bolshevik Party on the door.  The party did not 
reported the attack to police after five unsuccessful appeals to 
investigate similar vandal attacks. 
 
¶3. Democratic Seniors Denied Registration 
 
The Justice Ministry denied yet again registration to the 
association of democratic seniors, Our Generation, on October 20. 
Following elevated pressure and numerous interrogations of 
association members, the Ministry alleged that the submitted 
registration application contained fraudulent information regarding 
its founders and the venue of the founding convention.  The group 
was established on August 17 to defend the rights of retirees and 
advocate social security reforms. 
 
¶4. Independent Election Observer Fined 
 
On October 10, a Yelsk district court fined in absentia United Civil 
Party member and parliamentary elections independent observer Denis 
Ryabenok USD 500 for allegedly violating electoral law.  Ryabenok 
received official notification of court evasion and was fined on 
October 20.  The local prosecutor's office questioned the observer 
before the elections and charged him with illegally collecting 
signatures in support of an opposition hopeful. 
 
¶5. Opposition Youth Leader Detained and Interrogated 
 
On October 17, Russian border guards and secret service detained and 
interrogated Belarusian Popular Front youth branch leader Franak 
Vyachorka at a Moscow airport.  Warsaw-bound Vyachorka, banned from 
leaving Belarus for alleged draft evasion, was questioned for over 
an hour and released without charges.  Vyachorka asserted he would 
appeal to Russian and Belarusian law enforcement agencies to 
investigate the legal grounds for his detention. 
 
---------------- 
Domestic Economy 
---------------- 
 
¶6. Lukashenko Wants to Make Belarusian Banks Attractive to 
Foreigners 
 
The Presidential  press service reported that Lukashenka instructed 
National Bank Chairman Pyotr Prokopovich on October 17 to draft 
promptly a decree, which would guarantee all deposits in Belarusian 
banks regardless of their size.  This decree will allow unlimited 
and undeclared deposits in Belarusian banks by foreign citizens. 
Lukashenko requested that the Chairman also urgently draft 
regulations to launch Belarus onto the list of the world's top 
 
VILNIUS 00000905  002 OF 002 
 
 
thirty economies based on securing the most favorable loan 
conditions. 
 
¶7. National Bank Optimistic about Foreign Investment in Belarusian 
Banks 
 
The National Bank reported on October 17 that the share of foreign 
capital in the USD 2.5 billion aggregate charter fund of the 
country's thirty banks was 22.5 percent as of October 1 compared 
with 9.8 percent on January 1, 2008.  The share is expected to grow 
to 30 percent by the end of the year, which is still below the 
authorized limit of 50 percent.  Currently, twenty-four Belarusian 
banks have foreign investors, of which nineteen are more than 50 
percent foreign-owned.  Seven banks are one hundred percent 
foreign-owned. 
 
¶8. Russian Embassy Skeptical about Large Russian Investment in 
Belarus 
 
The Economic Counselor of the Russian Embassy in Minsk Andrei 
Kuznetsov told the Prime-Tass news agency on October 20 that the 
global financial crisis complicates discussions of large investment 
projects in Belarus.  He stated that Russian investors have other 
priorities, as they lack sufficient funding.  Lower demand makes 
Belarusian industrial assets cheaper, and the Counselor opined that 
now is not the optimal time to privatize them.  Some independent 
Belarusian economic analysts nevertheless believe Russians and the 
corrupt Belarusian elite will attempt to sell the assets at bargain 
prices. 
 
¶9. Large Banking Investments Postponed Indefinitely 
 
Chairman of the Board of Directors of Belarus' leading auditing and 
investment company UNITER Vladimir Vasilevsky told Prime-Tass news 
agency on October 20 that large foreign investment banks, including 
Barclays, UniCredit, and Goldman Sachs, have indefinitely postponed 
plans to invest in Belarus.  He said the global financial crisis 
made highly unlikely the purchases of stocks in Belarus' five 
leading banks by strategic investors from the world's top 
twenty-five banks in the near future. 
 
¶10. Russia to Issue Stabilization Loan to Belarus 
 
Russia's Finance Minister Alexei Kudrin announced on October 21 that 
his government will issue USD 2 billion stabilization loan to 
Belarus.  The first portion of USD 1 billion will be transferred 
before the end of this year, and another part is to be transferred 
next year.  The Finance Minister declined to comment on the terms of 
the loan.  In 2007, Russia granted a 15-year, 1.5 billion loan to 
Belarus under very beneficial terms. 
 
¶11. Belarus Requests Financial Assistance from the IMF 
 
The GOB approached the International Monetary Fund (IMF) on October 
17 with a request to provide USD 2 billion in financial assistance 
under a program that could be supported by a Stand-By Arrangement 
(SBA).  IMF Managing Director Dominique Strauss-Kahn issued a 
statement on October 22 that acknowledges that the global financial 
crisis has adversely affected the Belarusian economy and its access 
to external finance.  Changing conditions in trade have negatively 
affected the country's balance of payments.  Belarus' National Bank 
officials claim the country has no crisis-related problems but need 
the SBA to prevent such problems.  IMF will send a mission before 
the end of October to discuss such a program with authorities. The 
amount of financing has yet to be determined. 
 
----------------- 
Quote of the Week 
----------------- 
¶12. Answering journalists' questions at the Yama Memorial during an 
event to commemorate the 65th anniversary of the extermination of 
the Minsk ghetto, Lukashenka said: 
"Nothing impedes our cooperation with Israel.  We can and will 
expand this cooperation.  Nothing impeded our cooperation with the 
Arab world either.  Our friendship with Arabs is not against Jews, 
and our friendship with Jews is not against Arabs.  This is not the 
kind of policy we would pursue, and that is why we succeed in all we 
do." 
 
MILLER 
LEADER