EMBASSY MINSK WEEKLY POL/ECON REPORT - SEPTEMBER 26,

UNCLAS SECTION 01 OF 03 MINSK 001050

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SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - SEPTEMBER 26,
2006


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1. The following are brief items of interest compiled by
Embassy Minsk.

TABLE OF CONTENTS

INTERNATIONAL RELATIONS
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- Date Announced for CIS October Summit in Minsk (para. 2)
- Belarus' Foreign Minister to Address UNGA (para. 3)
- Foreign Ministries of Belarus, Iran Consult in Tehran (para. 4)
- Bearus, China Consider Easing Visa Procedures (para.5)

CIVIL SOCIETY
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- Minsk City Court Rejects Kozulin's Appeal (para. 6)
- Kozuln Threatens Hunger Strike, Wants Shadow Cabinet (pra. 7)
- Opposition Leader Released after 10 Day in Jail (para. 8)
- Information Ministry Suspens Magazine "Arche" (para. 9)

TRADE AND INVESTMENT
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- Russia Seeks Lion's Share of Belarus' Export Duties (para. 10)
- Belarus May Make Iranian Samand under Its Own Brand (para. 11)

DOMESTIC ECONOMICS
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- Statistics Ministry Reports 60,000 Jobless in August (para. 12)
- Belarus' Gas Pipeline Transit Up Seven Percent on Year (para.
13)

- QUOTE OF THE WEEK (para. 14)

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International Relations
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2. Date Announced for CIS October Summit in Minsk

On September 21, a source in the Commonwealth of Independent States
(CIS) Executive revealed to Belarusian independent media that the
CIS summit would be held October 16-17 in Minsk. Kazakhstan, which
currently chairs the alliance, reportedly has approved the agenda.
Foreign ministers and the heads of government are scheduled to hold
their sessions on October 16. Heads of state will meet the
following day. The CIS High-Level Group for Increasing Efficiency
will submit to the heads of state proposals for reform of the CIS,
including a draft agreement on Turkmenistan's associate membership
and a statement on cooperation in countering illegal migration.
The heads of state are also expected to sign agreements on the
prevention of money laundering, terrorist financing, and combating
human trafficking.


3. Belarus' Foreign Minister to Address UNGA

On September 21, Belarusian Foreign Ministry spokesman Andrei Popov
announced that Foreign Minister Sergei Martynov will participate in
a general political discussion at the 61st session of the UN
General Assembly between September 24 and 27. Martynov will
articulate Belarus' positions on issues of international security,
including the Middle East and reform of the United Nations.
According to Popov, Martynov hopes to garner support for Belarus'
proposals for development and a global partnership against slavery
and human trafficking that were offered by President Lukashenko at
the 2005 World Summit.



4. Foreign Ministries of Belarus, Iran Consult in Tehran

On September 18-19, the foreign ministries of Belarus and Iran held
a round of consultations in Tehran. Belarus' Deputy Foreign
Minister Viktor Gaisenok and Iranian Deputy Foreign Minister for
Asia-Pacific Affairs Mehdi Safari led discussions on trade,
investment and banking, and transportation. Gaisenok also met with
Iranian Trade Minister Mohammad Shariatmadari, who co-chairs the
Belarusian-Iranian commission for economic cooperation. In
addition, Gaisenok visited Belarus' section at an international
fair in Tehran and attended the opening ceremony for a Belarusian-
Iranian economic conference.


5. Belarus, China Consider Easing Visa Procedures

On September 19, representatives from the Belarusian and Chinese
foreign ministries met in Minsk to discuss easing visa procedures.
The Belarusian delegation was led by Oleg Karnachev, head of the
passport and visa office of the consular department, and the
Chinese delegation was headed by Zhang Ligo, deputy director

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general of the Department of Consular Affairs. The meeting also
covered consular protection, the prevention of illegal immigration,
and exchange of information.

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Civil Society
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6. Minsk City Court Rejects Kozulin's Appeal

On September 19, in a session attended by Poloff, the Minsk City
Court judicial board rejected former opposition presidential
candidate Aleksandr Kozulin's appeal to overturn his politically
motivated prison sentence of five and a half years for alleged
"hooliganism" and disturbing the peace. Kozulin's defense team
cited numerous violations of Belarus' Criminal Procedure Code as
proof that Judge Aleksey Rybakov failed to hold an unbiased trial.
The prosecutor denied any grounds for reviewing the verdict.
Following the appeal, authorities transferred Kozulin to a minimum
security correctional labor facility in the northern village of
Vitba near Vitebsk, where he is to serve out his prison term.


7. Kozulin Threatens Hunger Strike, Wants Shadow Cabinet

On September 20, imprisoned former opposition presidential
candidate Aleksandr Kozulin threatened an open-ended hunger strike
beginning on October 20 in protest against President Lukashenko's
third term in office. Kozulin called on the Belarusian opposition
to convene a meeting for the formation of a shadow cabinet.
According to Kozulin, the meeting should include current government
officials, the Belarusian National Assembly, representatives of the
Belarusian diaspora, and members of the 13th Supreme Soviet, which
Lukashenko dissolved following the controversial 1996
constitutional referendum. Kozulin also urged non-governmental
organizations and the Political Council of the United Democratic
Forces opposition coalition to create a tribunal commission for
trying Lukashenko. He stressed that "justice and the rule of law
should be restored" in the country. He warned that otherwise
Belarus might lose its independence, language, culture and people.


8. Opposition Leader Released after 10 Days in Jail

On September 22, authorities released opposition activist
Vyacheslav Sivchik. On September 18, Minsk Tsentralniy District
Court Judge Inna Sheyko had sentenced Sivchik to 10 days in jail
with six days time served for his role in an unauthorized three-day
opposition demonstration in October Square after Belarus' March 19
presidential election. Sivchik was convicted in May, but the Minsk
City Court invalidated the sentence because he was tried in
absentia. Sivchik's defense team plans to appeal to the Minsk City
Court and the city prosecutor's office to overturn the ruling.
Sivchik was severely beaten by police at the opposition "tent city"
in October Square on March 23. He fled to Ukraine shortly after
authorities attempted to arrest him at the hospital where he sought
treatment for his injuries. He returned to Belarus in mid-August.


9. Information Ministry Suspends Magazine "Arche"

On September 21, independent media reported that Belarus' Ministry
of Information has suspended the Belarusian-language intellectual
magazine "Arche" for three months. In its letter to "Arche" Editor-
in-Chief Valery Bulgakov, the ministry accused the monthly magazine
of publishing articles about politics in violation of its license
and cited the magazine's September issue whose cover features a
photograph of police officers violently dispersing anti-government
protesters in 1995. Bulgakov pledged to appeal the suspension and
insisted the article in question, published under the headline
"Crackdown: Recollections of 12th Supreme Soviet Deputies," is
about history, not politics. Article 11 of Belarus' Media Law
requires publications to notify the Ministry of Information one
month in advance about changes in the subjects they cover. In
2005, the magazine filed a request with the Ministry of Information
for permission to publish articles about politics but received no
official reply.

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Trade and Investment
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10. Russia Seeks Lion's Share of Belarus' Export Duties

On September 20, independent media reported that the Russian
government is demanding a larger share of export duties on oil
products produced from Russian oil at Belarusian refineries. The
GOR will reportedly ask the GOB for 85 percent of the duties, which
could bring USD 350 million to the Russian budget every year.
Subsidiaries of Russian firms supply duty-free oil to Belarusian
refineries and export oil products with low Belarusian duties to
Western Europe.


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11. Belarus May Make Iranian Samand Under Its Own Brand

On September 21, Belarusian First Deputy Minister of the Interior
Ivan Demidovich predicted that Belarus' closed joint stock company
ZAO Yunison could produce Iran Khodro's Samand cars under a
Belarusian brand name. Yunison began production of Samand vehicles
in August and expects to produce 1,000 Samands by the end of 2006.
The company's goal for 2007 is 5,000 to 6,000 vehicles.
Ultimately, Yunison hopes to increase annual Samand output to
50,000 to 60,000 vehicles. Under the current agreement between
Yunison and Iran Khodro, Samands assembled in Belarus may be
exported to Europe and Russia only with the consent of Yunison's
Iranian partners. The Samand is based on the Peugeot 405 platform
and is produced by Iran Khodro, reputedly the largest producer of
motorcars and buses in the Middle East.

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Domestic Economy
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12. Statistics Ministry Reports 60,000 Jobless in August

On September, the Ministry of Statistics and Analysis reported that
the official number of unemployed persons in Belarus totaled 60,000
by the end of August 2006, a 17.8-percent decrease since August

2005. Belarus' official unemployment rate was 1.4 percent of the
economically active population, 0.2 percentage point lower than a
year ago. Unemployment was higher in the Brest, Mogilyov and
Vitebsk regions, 1.7 percent, than in Minsk, which had the lowest
rate of 0.7 percent. By September, 203,000 people reportedly
applied for employment assistance, of whom 135,000 were officially
recognized as unemployed. Meanwhile, employment centers helped
133,000 people find jobs in the period. About 83 percent of all
vacancies were factory jobs. Employment centers reportedly
organized job training courses for 16,000 persons and assigned
about 62,000 to do community work, including 43,000 unemployed.
The average unemployment allowance in August was USD 20.


13. Belarus' Gas Pipeline Transit Up Seven Percent on Year

On September 21, the Belarusian Ministry of Statistics and Analysis
reported that natural gas transportation through Belarus' pipeline
system increased seven percent on the year between January and
August to 44.4 billion cubic meters. Meanwhile, Belarus' natural
gas imports increased 5.2 percent to 13.5 billion cubic meters.
Gas transit via Belarus' pipelines increased 8 percent to 30.9
billion cubic meters. Of that total, Russia's gas transit via
Belarus' pipelines to Poland accounted for 70 percent, to Ukraine
20 percent, and to Lithuania eight percent. The profitability of
Belarus' pipeline companies dropped 47.8 percent between January
and July from 64 percent in that period of 2005. In 2005, gas
transportation via Belarus rose 10.8 percent to 60.9 billion cubic
meters.

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Quote of the Week
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14. Following the recent summit of the Non-Aligned Movement in
Havana, President Lukashenko told a BBC interviewer:

"If the United States believes that we are a sovereign state, which
we are, they should act in accordance with this belief instead of
lording it over us or pressing us. We deserve to be talked to as a
sovereign state. We do not want much. We just want normal
cooperation that will be of benefit to our state. If the Americans
agree, we are ready to cooperate with them as early as tomorrow."

Stewart