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UNCLAS SECTION 01 OF 03 MINSK 000032 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON EFIN ETRD ENRG KDEM BO
SUBJECT: BELARUS BI-WEEKLY POL/ECON REPORT -  JANUARY 29, 2010 
 
MINSK 00000032  001.3 OF 003 
 
 
¶1.  The following are brief items of interest compiled by 
Embassy Minsk. 
 
TABLE OF CONTENTS 
 
Civil Society 
------------- 
 
- GOB Increases Harassment and Pressure Against Unrecognized 
Union of Poles (para. 2) 
- United Democratic Forces Pledge to Continue Activities Amid 
Uncertainty and Defection (para. 3) 
- Another Activist of the "Case of 14" is Amnestied, Dubski 
Remains in Jail  (para. 4) 
 
Domestic Economy 
---------------- 
 
- Belarus Signs Oil Deal With Russia, But Belarus Claims It Is 
Only Temporary (para. 5) 
- EU and Belarus Officials Discuss Customs Union, Resumption of 
GSP and Belarus' WTO Accession 
 (para. 6) 
- China to Open $5.7-Billion Credit Line for Belarus (para. 7) 
- Belarus Ranked 150th Freest Economy among 179 Countries 
(para. 8) 
 
Quote of the Week (para. 9) 
--------------------------- 
 
------------- 
Civil Society 
------------- 
 
¶2. GOB Increases Harassment and Pressure Against Unrecognized 
Union of Poles 
 
As part of an effort to keep them from attending a January 21 
meeting in Ivyanets, police detained for several hours up to 46 
members of the Warsaw-backed Union of Poles in Belarus (UPB), an 
organization not recognized by the GOB.  All were released with 
no charges filed after a Polish diplomat intervened on their 
behalf.  The Ivyanets local chapter of the state-controlled 
Union of Belarusian Poles was scheduled to elect a new 
chairperson to replace Teresa Sobal, longstanding prominent 
manager of the local Polish House.  The UPB members succeeded in 
reelecting Sobal. However, the GOB moved at the same time to 
engineer the appointment of a more pliant candidate to chair the 
local chapter.  Confrontation resulting from the split between 
the two Unions has deepened since 2005, with pressure on the UPB 
increasing. Police opened on December 18, 2009 a criminal case 
against Sobal over alleged misappropriation of funds in 2004. 
She has been banned from traveling abroad during the 
investigation.  In addition, UPB leader Anzhelika Borys is 
facing charges of purported tax evasion.  The Polish Embassy in 
Minsk expressed concern about the detentions and "escalation of 
the conflict" and warned that "all existing agreements on the 
status of this organization [UPB] are now in jeopardy."  The 
European Parliament President, Jerzy Buzek, stated on January 22 
that "we should respond decisively and firmly."  The GOB 
countered by informing the Polish Embassy on December 26 that 
certain Polish diplomats in Belarus had failed to comply with 
"international agreements regulating activities of foreign 
diplomats in host countries." 
 
¶3. United Democratic Forces Pledge to Continue Activities Amid 
Uncertainty and Defection 
 
The United Democratic Forces' (UDF) Political Council held a 
meeting on January 24 to discuss the group's membership and 
overall strategy in advance of the April 25 local election and 
2011 presidential poll.  Leader of the United Civic Party and 
UDF Co-chair Anatol Lyabedzka refuted speculation that there 
would be no viable political opposition to contest these 
elections.  "Despite different opinions," he said, the UDF 
"would work as one team during the local elections," including 
fielding candidates, campaigning, and monitoring the vote 
count."  However, the UDF decided to postpone its presidential 
primaries until at least April 2010 due to elevated pressure by 
the GOB on a number of teachers in the Minsk region who had been 
threatened with dismissals for their affiliation with opposition 
groups.  UDF Co-chair and Belarusian Party of the Left 
Spravedlivy Mir leader Syarhey Kalyakin echoed Lyabedzka's 
remarks on the need for opposition unity, saying that "under 
conditions of a dictatorship" there could be "no alternative to 
the UDF" and those "trying to destroy this platform" were acting 
"irresponsibly."  He urged the UDF to review its strategy, have 
 
MINSK 00000032  002.3 OF 003 
 
 
more members represented in the leadership, and make activities 
more effective.  Belarusian Social Democratic Party Hramada 
Chairman and UDF Co-Chair Anatol Lyaukovich called upon UDF 
members to nominate one candidate per district to run for local 
polls.  An independent political expert with the UDF, Vatslau 
Areshka, opined that the coalition would suspend attempts to 
establish a dialogue with the GOB until authorities demonstrate 
willingness to engage on an equal basis.  He also suggested 
streamlining efforts to forge more unity among opposition 
groups, in particular, between the recently established 
Belarusian Independent Bloc (BIB) and the UDF.  However, the 
BIB's core member For Freedom movement announced its withdrawal 
from the UDF on January 26, but stated that it might cooperate 
with "separate" UDF members because in its view "the coalition 
does not exist anymore." 
 
¶4. Another Activist of the "Case of 14" is Amnestied, Dubski 
Remains in Jail 
 
On January 15, police notified Ales Charnyshou that he had been 
granted amnesty.  Charnyshou is one of the 14 opposition youths 
who had participated in the January 2008 unsanctioned 
entrepreneur demonstrations in Minsk.  He had been serving a 
"correctional labor" sentence under which he was required to pay 
15% of his salary to the state and banned from traveling abroad. 
 In the "case of 14," 1) nine have been amnestied or have paid 
their fines; 2) two continue to serve sentences; Artsyom Dubski 
is serving a one year prison sentence for violating his partial 
house arrest, and Maksim Dashuk remains under an extended 
partial house arrest; and 3) three fled overseas and face 
criminal evasion charges if they return to Belarus.  Dubski has 
been denied an early release due to alleged violations of the 
"prison regime," deemed ineligible for the 2009 amnesty 
procedure because he is serving a consecutive term, and has not 
received an answer to his appeal to the Supreme Court following 
a denial by the Mahilyou Regional Court. 
 
---------------- 
Domestic Economy 
---------------- 
 
¶5. Belarus Signs Oil Deal With Russia, But Belarus Claims It Is 
Only Temporary 
 
Belarus' Vice Premier Uladzimir Syamashka and his Russian 
counterpart Igor Sechin signed a package of documents on January 
27 that will govern Russian oil deliveries to Belarus and oil 
transit across Belarusian territory in 2010.  According to 
initial readings, Belarus agreed to Russia's conditions that 
duty-free deliveries will be limited to the 6.3 million tons a 
year needed for domestic purposes. (Amounts above that imported 
by Belarus for refining and transshipment will no longer enjoy 
preferential duty rates).  Syamashka said the parties also 
agreed that oil used to make refined oil products for export to 
Russia will not be subject to Russian export duties.  There is 
scope in the agreement for the total volume of duty-free 
deliveries for domestic needs to increase in proportion to 
Belarus' GDP growth, which is projected by the GOB to rise by up 
to 11 percent this year (Note: IMF projections fall within a 3-4 
percent range. End Note).  Syamashka claimed that "Belarus' 
budget losses will not be as heavy as had been expected." The 
parties also signed a joint declaration pledging uninterrupted 
transit of Russian oil across Belarus to third countries. 
Syamashka told the press that Belarus's fee charged for the 
transit of Russian oil will increase by 11 percent. The fee was 
set previously at $3.9 per ton.  Minsk also reserves the right 
to annually raise the fee "by the rate of inflation in Russia 
plus three percent," Syamashka said. Russian DPM Sechin 
reportedly told Russian President Dmitry Medvedev later on the 
same day that the signed agreements "represent a compromise" and 
are "well balanced."  Sechin said, "We agreed to a number of 
compromises, bearing in mind the special relationship with our 
brotherly republic, with the people of Belarus."  Medvedev was 
quoted as saying that Russia's position was to "give our 
Belarusian partners benefits by providing delivery for internal 
use at a reduced price and, on the other side, to guarantee 
transit."  The Chairperson of Belarus' National Bank (NBB) Petr 
Prakapovich stated that because Russian crude oil supplied to 
the country (for refining and onward sale) is going to be 
subject to full export duties, Belarus will need additional 
external financing. In this regard, he does not rule out the 
possibility of signing a new long-term agreement with the IMF, 
an issue to be addressed later.   Also Syamashka announced that 
Belarus will continue insisting on abolishing export duty on 
crude oil within the Customs Union.  The signed agreement "will 
not live for long," Syamashka said, and added that "goods should 
move freely within the customs union. I think the Russian side 
 
MINSK 00000032  003.3 OF 003 
 
 
realizes this. We should return to this matter once again and I 
think there will be considerable radical changes." 
 
¶6. EU and Belarus Officials Discuss Customs Union, Resumption of 
GSP and Belarus' WTO Accession 
 
According to the media, the office of the European Commission in 
Minsk issued a statement on January 27 to express concern about 
the possible negative effects that the establishment of the 
Customs Union of Belarus, Kazakhstan and Russia may have for 
Belarus-EU trade. The visiting European Commission's trade 
delegation urged their Belarusian counterparts on January 25-26 
to "support the removal of adverse measures introduced by the 
Customs Union that brought about increased tariffs for numerous 
important EU export product~ and resist protectionist pressure 
by refraining from imposing new de-liberalization measures." 
With reference to the potential resumption of trade benefits for 
Belarus under the EU Generalized System of Preferences (GSP), 
the EU officials noted without elaboration that "Belarus has the 
possibility to create the necessary conditions to restore such a 
preferential regime." (Note: To obtain access to GSP it must 
receive a good score card on union activity in Belarus from the 
International Labor Organization, and last fall the ILO reported 
backtracking versus progress by the GOB) Belarus, also, did not 
succeed in gaining EU support for its WTO accession efforts. 
According to the EU statement, the delegation "sought to better 
understand recent developments in Belarus's economic and trade 
policies, including effects of the introduction of Customs Union 
rules, and emphasized the need to receive from Belarus updated 
information (on implementation of those rules)." 
 
¶7. China to Open $5.7-Billion Credit Line for Belarus 
 
The Chairman of Belarus' National Bank of (NBB) Pyotr 
Prakapovich told reporters in Minsk on January 27 that "Belarus 
and China have very good relations in the financial sphere.  We 
and China have signed an agreement on the opening of a 
$5.7-billion credit line and we are working on implementing 
(projects)."  (Note: This follows a three-year swap deal struck 
by Belarus and China in March 2009.  Under the deal, China is to 
give 20 billion yuans (some $3 billion) to Belarus and in return 
receive eight trillion Belarusian rubles.  As a result of the 
deal, Chinese importers will pay for Belarusian-made goods in 
rubles and vice versa.) 
 
¶8. Belarus Ranked 150th Freest Economy among 179 Countries 
 
According to media reports, Belarus was ranked 150th freest 
economy among 179 states in the 2010 Index of the Heritage 
Foundation and The Wall Street Journal released last week. 
Belarus is ranked 42nd among 43 European countries.  According 
to the report "Belarus's economy is still characterized by 
pervasive state involvement and control, the small private 
sector remains marginalized~ The government controls many 
financial institutions, directly or partially. Beside insecure 
property rights and corruption, foreign investment faces 
restrictions and bureaucratic inefficiency." 
 
----------------- 
Quote of the Week 
----------------- 
 
¶9. Commenting on the new appointments made in the Belarusian 
Committee on State Security (BKGB) on January 22 Lukashenka 
noted that the KGB is "in the first place required to provide 
thoroughly verified information of a preventive nature, based on 
which major managerial decisions can be made." 
SCANLAN