VZCZCXRO7376
RR RUEHIK
DE RUEHSK #0385/01 3281739
ZNR UUUUU ZZH
R 241739Z NOV 09
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 0560
INFO RUEHZG/NATO EU COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHVEN/USMISSION USOSCE 0012
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHSK/AMEMBASSY MINSK 0568

UNCLAS SECTION 01 OF 05 MINSK 000385 
 
SENSITIVE 
SIPDIS 
 
FOR EUR/UMB (KRUPPERT) 
FOR DRL (DNADEL) 
FOR EUR/ACE (KSALINGER AND NKRYSTEL) 
EMBASSY KYIV FOR USAID (JRIORDAN AND KMONAGHAN) 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: BELARUS BI-WEEKLY POL/ECON REPORT - NOVEMBER 20, 2009 
 
REF: MINSK 382 
 
MINSK 00000385  001.3 OF 005 
 
 
1.(U) The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
 
- Another "Case of 14" Amnestied, but Dubski Remains in Prison 
(para. 2) 
- Registering Independent Media; A Step Forward and Two Back 
(para. 3) 
- The Opposition Splits: Different Tactics and Political 
Ideology (para. 4) 
- Belarusian Christian Democracy Try to Register, Yet Again 
(para. 5) 
 
Elections 
--------- 
 
- Liberalizing Electoral Laws Behind Closed Doors (para. 6) 
 
H1N1 
---- 
 
- GOB Berates "Artificial" Panic Around H1N1 Flu (para. 7) 
 
Domestic Economy 
---------------- 
 
- Belarus:  A Slow Approach to WTO Accession (para. 8) 
-  GOB Yes to Third IMF Tranche, But Ambivalent on Follow on SBA 
(para. 9) 
- Belarus Still Hopes for a $500M Loan from Russia (para. 10) 
- Lukashenka Expresses Doubt with the Customs Union (para. 11) 
- Gas Prices for Belarus Remain an Open Question (para. 12) 
- Belarus Unable to Control its Growing Trade Deficit (para. 13) 
- PM and Experts Agree: More Economic Reforms Are Needed (para. 
14) 
 
Quote of the Week (para. 15) 
---------------------------- 
 
------------- 
Civil Society 
------------- 
 
2.(U) Another "Case of 14" Amnestied, but Dubski Remains in 
Prison 
 
On November 13, police notified Ales Straltsou that he had been 
granted amnesty.  Straltsou is one of the 14 opposition youth 
who had participated in the January 10, 2008 unsanctioned 
entrepreneur demonstrations in Minsk, a criminal offense in 
Belarus.  He was serving a mitigated "correctional labor" 
sentence of fourteen months, i.e. required to pay 15% of his 
salary to the state and banned from traveling abroad.  In the 
"Case of 14," eight have been amnestied or have paid their 
fines; three have fled the country and face criminal evasion 
charges if they return to Belarus; and three continue to serve 
their sentences:  Alyaksandr Charnyshou a mitigated 14 month 
"correctional labor" term; Maksim Dashuk an extended partial 
house arrest regime, and Artsiom Dubski a one year prison 
sentence for violating the terms of his partial house arrest 
regime.  All requests by Dubski for early release have been 
either rejected or left unanswered by the GOB and/or the courts. 
 
3.(SBU) Registering Independent Media; A Step Forward and Two 
Back 
 
On November 11, the Council of Ministers allowed the 
Polish-based European Radio for Belarus (ERB) to open its bureau 
in Minsk.  The bureau's accreditation is for one year, but it 
applies only to the bureau.  ERB's twelve correspondents must 
now individually apply for accreditation to the MFA, itself an 
open ended process.  On a separate issue, the Information 
Ministry refused on November 10 to register the regional 
independent newspaper Prefekt-Plus, on the grounds that it cited 
a residential residence as its offices, which is illegal. 
According to the Belarusian Association of Journalists this is 
the sixth denial of registration to regional independent 
newspapers in the past three months.  Also, local authorities in 
 
MINSK 00000385  002.3 OF 005 
 
 
Barysau refused to extend in October a retail trade license to 
the independent regional weekly Borisovskie Novosti [Barysau 
News].  The paper, despite being banned from the state-run 
distribution and subscription network, proved to be viable. 
This latest move by the GOB, however, may force it into 
bankruptcy.  Aggravating the situation, local authorities are 
obstructing the paper's efforts to reach agreements with small 
businesses to sell copies of the weekly on the grounds that 
paper slanders local and national authorities. 
 
4.(SBU) The Opposition Splits: Different Tactics and Political 
Ideology 
 
On October 27, former members of the United Democracy Forces 
(UDF) announced the establishment of a right of center 
Belarusian Independence Bloc (BIB).  The political groups 
consists of registered (For Freedom (FF) movement, Belarusian 
Popular Front (BPF), Right Alliance) and unregistered (Malady 
Front, Young Belarus, BCD party, Party of Freedom and Progress) 
parties, NGOs, and youth associations.  Its three interdependent 
core principles are:  a sovereign Belarus, a democratic Belarus, 
and a European Belarus.  On November 14, BIB participated in the 
European Forum its de facto political congress (reftel).  FF 
leader Alyaksandr Milinkevich, the Forum's main organizer, 
called for the EU to embrace Belarus as opposed to isolating it 
in order to affirm its sovereignty and promote "irreversible" 
democratic changes in Belarus.  He announced that the new Bloc 
would participate in the 2010 local elections and nominate a 
presidential candidate, a role, he said, he would be open to 
playing.  Meanwhile, Anatol Lyabedzka, the United Civic Party 
(UCP) leader and Co-Chair of the United Democratic Forces (UDF) 
opposition coalition, voiced skepticism about the "defeatist" 
policies of BIB.  He stated that the UCP would not join the 
bloc, would pursue its own election strategy, and that it was "a 
mistake" to abandon the broader coalition of democratic forces 
established in the run up to the 2006 presidential polls.  With 
two major coalitions in place, the opposition will likely 
nominate at least two candidates for the 2011 presidential 
candidates.  Lyabedzka also announced that the UDF would hold 
its "pilot" presidential primary in the Vorsha district in 
January-February 2010, to begin refining the process of 
selecting its candidate for the 2011 race.  Nevertheless, the 
leadership of BIB and UDF has independently told the Charge that 
they will cooperate in the local elections with the hopes of 
nominating up to two hundred candidates for the 25,000 local 
positions that will be contested, an indication of the limited 
depth of the opposition's bench. 
 
5.(U) Belarusian Christian Democracy Try to Register, Yet Again 
 
On November 9, the Belarusian Christian Democracy (BCD) party 
applied for registration to the Ministry of Justice (MOJ); its 
original registration had been denied on April 15, 2009.  To 
initiate the second attempt at registration, BCD held its second 
founding congress in Minsk on October 31.  Over 300 delegates 
attended the meeting.  Initially, Minsk city authorities 
regretted that all venues were already reserved, but when BCD 
threatened to stay their Congress in one of the city's central 
squares, the city authorities relented.  However, on October 31 
authorities in the regions detained for ID checks a number of 
the BCD members causing them to miss the Congress.  An EMBOFF 
observed the event, but neither the state media nor the security 
services were visible noticeable.  Independent media did cover 
it live.  The party, in preparation for a second rejection, 
filmed the Congress so as to document that all procedures had 
been legally followed.  Nevertheless, according to Vital 
Rymashewski, Co-chairman of the BCD, authorities across Belarus 
already have begun pressuring party activists to deny that they 
attended the Congress or voluntarily signed the founding 
petition.  "We believe that this pressure may already be 
described as political persecution~  We urge authorities and 
personally Alyaksandr Lukashenka to immediately stop the 
persecution of the party's founders and their families," 
Rymashewski said in a statement to the press.  (Note:  If a 
sufficient number of founding members recant their signatures, 
the registration, as was the case previously, will be denied for 
"technical" reasons.) 
 
--------- 
Elections 
--------- 
 
6.(U) Liberalizing Electoral Laws Behind Closed Doors 
 
MINSK 00000385  003.3 OF 005 
 
 
 
On November 10, Lukashenka's press offices announced that the 
Central Election Commission (CEC) had submitted amendments to 
the electoral law to the parliament with the expectations that 
they would be adopted before the December 28 recess.  The CEC's 
amendments (not a public document) reportedly require that a 
minimum of one-third of the precinct and district election 
commission members be representatives of political parties and 
NGOs.  In addition, procedures for candidates' nomination and 
registration will be simplified, including allowing parties to 
nominate candidates in electoral districts even if they have no 
registered office.  Campaigning, however, will only be allowed 
in designated venues and the candidates "will need to notify 
authorities in advance to ensure security and order," the 
President stressed.  Candidates may set up election funds, but 
fundraising and spending would be under "strict" state 
supervision.  The CEC proposal also plans to introduce broader 
rights for observers to monitor ballot counting, but this would 
still be contingent upon "decisions" taken by election 
commissions' chairs, Lukashenka stated.  According to the 
President, the changes are being introduced not because of 
"pressure" from the EU but because Belarus was "a sovereign 
state" seeking to implement policies in its own interests while 
drawing on "the best world practices."  There is no legal 
requirement for legislation to be vetted with the public before 
it's passed. 
 
---- 
H1N1 
---- 
 
7.(U) GOB Berates "Artificial" Panic Surronding H1N1 Flu 
 
The Information Ministry prohibited on November 4 
state-controlled media outlets to publish unauthorized reports 
on the spread of the swine flu.  On November 5, during his 
official trip to Kyiv, President Lukashenka blamed 
pharmaceutical companies for whipping up hysteria around the flu 
and only seeking "to make money additionally on people's 
trouble." On November 10, following public criticism of the 
deficit of information, the Healthcare Ministry confirmed that 
13 people had died in Belarus of the H1N1 flu.  As of November 
16, the number of the laboratory-verified cases of H1N1 flu had 
reached 165 but now numbers of cases are reportedly declining. 
On November 17, the Healthcare Ministry announced a tender to 
purchase of H1N1 flu vaccines despite its earlier statement that 
Russia would and supply the vaccines to Belarus "either for 
payment or free of charge." 
 
---------------- 
Domestic Economy 
---------------- 
 
8.(U) Belarus:  A Slow Approach to WTO Accession 
 
Various media outlets carried the comments by Valery Sadokha of 
Belarus' Foreign Ministry at the Minsk Forum XII that the GOB 
would not "accelerate significantly" the country's WTO accession 
efforts since the organization had put forward "high demands" 
including requests for Belarus to reduce import duty rates.  The 
GOB, he said, would work at its own pace to bring the country's 
laws and regulations in line with the WTO's recommendations. 
Nevertheless, he referred to "promising relations" established 
this year with the IMF and the EBRD as examples of Belarus' 
interest in cooperating with international organization. 
 
9.(U) GOB Yes to Third IMF Tranche, But Ambivalent on Follow on 
SBA 
 
An IMF staff mission and the Belarusian authorities reached 
agreement, subject to approval by the IMF Executive Board, on 
the completion of the third review of the Stand-By Agreement 
(SBA) with Belarus.  The third review is to be considered by the 
IMF Executive Board in late December.  Upon completion of the 
review, SDR 437.93 million (close to $700 million) will become 
available for disbursement by the end of the year.  Regarding a 
follow on SBA, Deputy PM Andrei Kabiakou announced on November 
13 that the GOB has not yet decided whether it will apply for a 
new IMF SBA after the current one is "completed in Q1 2010." 
Kabiakou underscored that the foreign trade deficit was 
decelerating, citing "$180 million in the last reporting month" 
vs. "$500-$600 million a month in early 2009."  "Base on these 
results, we will decide" in 2010 whether we need a follow on 
 
MINSK 00000385  004.3 OF 005 
 
 
SBA, he added 
 
10.(U) Belarus Still Hopes for a $500M Loan from Russia 
 
According to media reports, Russian Finance Minister Aleksei 
Kudrin told reporters in Moscow on October 28 that Belarus had 
not withdrawn its request for a $500 million loan from Russia 
despite the latter's refusal to lend the money bilaterally.  Mr. 
Kudrin, however, did state that the loan to Belarus could be 
issued in the framework of the Eurasian Economic Community 
(EurAsEC).  The EurAsEC, which is comprised of Russia, 
Kazakhstan, Belarus, Kyrgyzstan, and Tajikistan, will start 
operating a $10 billion anti-crisis fund after the agreement is 
ratified by all EurAsEC members.  Belarus' parliament ratified 
it on October 28. 
 
11.(U) Lukashenka Expresses Doubt with the Customs Union 
 
Speaking on November 17 at a televised government session, 
Lukashenka expressed doubt that the proposed Customs Union of 
Belarus, Russia and Kazakhstan would be in Belarus' best 
interests.  He opined that Russia and Kazakhstan, who unlike 
Belarus posses hydrocarbon energy resources, had managed to 
ensure provisions and decisions, which benefit them but might 
jeopardize Belarus' interests. In addition, Lukashenka expressed 
skepticism that the Single Customs Tariff, which is scheduled to 
be launched on January 1, 2010, has been fully vetted by the GOB 
in terms of its impact on Belarus' economy.  Lukashenka said it 
was still not clear if Russia would lift export duties on 
Belarus-bound oil or if the Customs Union would establish 
uniform pricing policy for natural gas. Another concern he 
raised was the fair distribution of tariff payments for imports 
from third countries.  "Will our membership in the Customs 
Union, which is formed mostly on Russian conditions, enable us 
to recover the lost profits from cooperation with third 
countries?" Lukashenka instructed the GOB to analyze the 
situation and submit its recommendations to him before the end 
of November, when the three countries are supposed to sign in 
Minsk the documents launching the Customs Union. 
 
12.(U) Gas Prices for Belarus Remain an Open Question 
 
The position as stated by Gazprom CEO Aleksei Miller on October 
11 is that "the Belarusian side must fulfill its [contractual] 
obligations".  Under a five-year contract signed with Gazprom on 
December 31, 2006 the natural gas price for Belarus is to 
gradually increase to the European market level by 2011.  On 
November 12, commenting on Belarus' gas situation the Belarus 
Prime Minister referred to a Belarus-Russia agreement that 
stated consumers in both countries should pay the same price for 
gas as of January 1, 2011.  That agreement should put into 
question, he said, Gazprom's decision to raise gas price for 
Belarus in 2010.  The GOR was deferring gas hikes on its 
consumers until 2014, and thus per the cited agreement gas hikes 
should also be deferred on Belarusians until after 2014. 
According to press reports aired on November 16, the natural gas 
price for Belarus had dropped from $157.74 per one thousand 
cubic meters (tcm) in the second quarter to $115.25 in the third 
quarter this year.  Belarus, however, reportedly owes Gazprom 
$165.84 million as of October 1 primarily automatic fines 
triggered by the contract's requirement of minimum purchase 
during the course of the year.  The parties have allegedly 
agreed to settle the debt before the end of this year. 
 
13.(U) Belarus Unable to Control its Growing Trade Deficit 
 
Belarus' Deputy Prime Minister Vladimir Patupchyk told the 
Parliament on October 28 that the foreign trade deficit exceeded 
$3.5 billion in the first nine months, which vastly exceeded the 
GOB's initial projection of $1.5 billion for the year.  He 
explained that the trade gap was growing because products with 
imported components that were intended for export could not find 
market and instead inventories were just expanding.  As of 
October 1, 2009, inventories were at 168 percent of the average 
monthly output.  Overall, export of goods and services fell by 
42.4% year-on-year in the first nine months whereas imports 
decreased only by 34.5%.  Belarus' GDP did increased by 0.4 
percent year-on-year in the first seven months, but declined by 
0.5 percent in the first eight months and by 0.3 percent in the 
first nine months.  In an effort to promote import substitution, 
Lukashenka introduced on November 16 higher customs tariffs on 
food products and raw materials for a period of nine months. 
Tariffs on milk, cheese and pasta were doubled to 30 % of the 
 
MINSK 00000385  005.3 OF 005 
 
 
customs value. Tariffs on potatoes, onions, cabbage and carrots 
were set at 180 % of the customs value, up from 15% on average. 
The edict also increased for one month tariffs on cucumbers and 
tomatoes from 15%.to 50% for a period of one month. 
 
14.(U) PM and Experts Agree: More Economic Reforms Are Needed 
 
According to media reports, PM Sidorski stated on November 12 at 
the Belarusian Investment Forum that the GOB is committed to 
continue reforms in "all sectors of economy", stating that "we 
are now working on a dramatic reduction in the number of 
activities requiring a license."  The GOB will allegedly 
streamline "accounting procedures and international financial 
reporting standards in 2010.  Sidorski announced plans to 
develop "a single investment agency" under the PM that "will 
provide convenient conditions for investors' activity in 
Belarus."  Speaking at the same event the World Bank's' 
International Finance Corporation (IFC) Representative in 
Belarus, Craig Bell referred to 2009 studies, which indicate 
that "investors find the situation in Belarus complicated, 
non-transparent, and inconsistent."  While the legal and 
regulatory environments remain undecided, only 30% of Belarus' 
GDP accounts for the private sector.  At the same time, he 
welcomed the liberalization of price controls and the abolition 
of loan interest caps as well as simplification of business 
registration and tax procedures. 
 
----------------- 
Quote of the Week 
----------------- 
 
15.(U) During his state visit to Ukraine on November 5 
Lukashenka told reporters in a joint press opportunity with 
Ukrainian PM Yulia Tymoshenko: 
 
"You are in difficult times. So many problems have fallen upon 
this poor woman [Tymoshenko]. She is fighting alone among men. I 
cannot congratulate you on what is happening. I simply wish that 
you will remain unharmed and that you will come out of this 
great battle." 
SCANLAN