EMBASSY MINSK WEEKLY POL/ECON REPORT - OCTOBER 06,

UNCLAS SECTION 01 OF 04 MINSK 001099

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON KTDB KHIV BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - OCTOBER 06,
2006


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

TABLE OF CONTENTS

ELECTIONS
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- Milinkevich as Campaign Aide for Local Candidates (para. 2)

CIVIL SOCIETY
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- Opposition Activist Jailed for 2005 Bombings in Vitebsk (para. 3)
- Opposition, Journalists, Artists Support Dashkevich (para. 4)

INTERNATIONAL RELATIONS
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- Lower Chamber Grants NATO Landmine Teams Immunity (para. 5)
- Lukashenko Accepts Credentials from 10 Ambassadors (para. 6)
- Belarus' Border with Latvia and Lithuania Demarcated (para. 7)

Health
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- Over 500 New HIV Cases Reported in Belarus in 2006 (para. 8)

TRADE AND INVESTMENT
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- Lower Chamber Approves Free Trade with Ukraine (para. 9)
- Lawmakers Discuss Ending Seizures for Petty Smuggling (para. 10)
- MTS Claims Belarusian Subscriber Base Up to 3 Million (para. 11)

DOMESTIC ECONOMICS
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- Belarus' BeST Claims 11,000 Clients As of October 1 (para. 12)
- GOB Projects Slower Long-term GDP Growth (para. 13)

- QUOTE OF THE WEEK (para. 14)

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Elections
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2. Milinkevich as Campaign Aide for Local Candidates

On October 5, former opposition presidential candidate Aleksandr
Milinkevich announced plans to become a campaign aide for several
candidates in local elections scheduled for January 14 and to "tour
as many cities as possible." Criticizing amendments to the
Electoral Code passed by the Belarusian House of Representatives on
October 2 that would allow candidates to meet with voters only with
permission from local authorities, Milinkevich declared, "The
regime is really afraid of us and afraid of our dialog with people.
We will find opportunities to hold various meetings together with
candidates for local councils during the elections. We've been
stripped of the right to choose." Milinkevich called upon the
opposition to stage a major demonstration every three months.

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Civil Society
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3. Opposition Activist Jailed for 2005 Bombings in Vitebsk

On October 5, authorities detained opposition youth activist Pavel
Krasovsky on suspicion of involvement in bombings that injured more
than 50 people in the northern city of Vitebsk on September 14 and
22, 2005. Authorities reportedly charged Krasovsky with attempted
murder and seized computer equipment and printed material from his
residence. Krasovsky, a member of the opposition youth
organization Malady Front, reportedly resembles a police composite
picture of the bombing suspect. In October 2005, President
Lukashenko claimed that two brothers, Vitaly and Yuriy Murashko,
had admitted to setting off the explosive devices. However, in
early 2006, the brothers were freed on their own recognizance; to
date, there are no reports regarding the charges against them.


4. Opposition, Journalists, Artists Support Dashkevich

On October 5, a group of opposition politicians, independent
journalists and artists joined the campaign to release opposition
youth leader Dmitry Dashkevich. Led by former opposition
presidential candidate Aleksandr Milinkevich, the group has about
30 members, including Milinkevich's wife, Inna Kulei, who heads a
committee which supports victims of repression, Belarusian
Association of Journalists Chair Zhanna Litvina, prominent poet Nil

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Gilevich, and representatives of the youth wings of the opposition
United Civic Party and the Belarusian Popular Front. The group
will continue collecting signatures from those willing to testify
for the defense at Dashkevich's possible trial. Milinkevich
promised to bolster international support for Dashkevich, who was
taken to a pre-trial detention center on September 15. A leader of
the opposition youth organization Malady Front, Dashkevich was
formally charged under Article 193 of the Criminal Code, which
penalizes running an unregistered organization. Two other Malady
Front leaders, Boris Goretsky, and Oleg Korban, face the same
charge.

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International Relations
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5. Lower Chamber Grants NATO Landmine Teams Immunity

On October 2, the lower chamber of the Belarusian National Assembly
ratified a memorandum of understanding between Belarus and the NATO
Maintenance and Supply Agency (NAMSA) that exempts from taxes and
prosecution NAMSA personnel, who are providing material and
technical assistance to Belarus in the disposal of landmines.
According to Belarusian Defense Minister Leonid Maltsev, Belarus
will receive 200,000 Euros for destroying its TNT landmines under
the memorandum. Belarus has pledged to destroy before March 1,
2008, more than four million landmines that it inherited from the
Soviet Union, including TNT landmines and 3.3 million PFM
landmines, which contain toxic liquid explosives.


6. Lukashenko Accepts Credentials from 10 Ambassadors

On October 3, President Lukashenko accepted credentials from the
ambassadors of Australia, Bosnia and Herzegovina, Cyprus, Denmark,
Hungary, Jordan, Mauritania, Pakistan, the Philippines and the
Republic of South Africa. All are also ambassadors to Russia and
reside in Moscow.


7. Belarus' Border with Latvia and Lithuania Demarcated

On October 3, the last border sign at the Belarusian-Latvian border
was erected along Belarus' borders with Latvia and Lithuania. A
total of 1,968 poles were set up on the 680-kilometer Belarusian-
Lithuanian border and 425 poles on the 170-kilometer Belarusian-
Latvian border. The demarcation of Belarus' Baltic borders began
in 1998. A total of USD 13.5 million will reportedly have been
spent on the project, including USD 8.84 million by the GOB and USD
4.66 million by the European Commission's TACIS program. Belarus,
Latvia and Lithuania will sign final demarcation documents in 2007.

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Health
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8. Over 500 New HIV Cases Reported in Belarus in 2006

On October 4, UNDP Resident Representative Cihan Sultanoglu
reported that 552 new HIV cases were recorded in Belarus between
January and September 2006 and that as many as 7,566 Belarusians
were diagnosed as HIV-infected as of October 1, 2006. The eastern
Gomel region has the highest rate of HIV infection, with 4,147
reported cases. In Minsk, 1,083 persons are known to be infected.
Belarusians between 15 and 29 years of age accounted for 75 percent
of all HIV infection cases. Men account for 67 percent of all HIV
cases. Most HIV-infected persons, 65 percent of all cases, were
intravenous drug users. According to Sultanoglu, 334 persons
contracted the disease sexually between January and September of

2006. Meanwhile, 100 babies were born to mothers with HIV; 94
babies tested HIV-positive. Sultanoglu noted that 600 HIV-infected
people in Belarus are getting anti-retroviral treatment under a
project on the prevention and treatment of HIV/AIDS in Belarus
funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria.
The Global Fund pledged to provide USD 17 million for the project.
About USD 6.9 million was disbursed in 2005. The remaining USD 10
million will be allocated within three years, doubling the number
of Belarusians who receive anti-retroviral treatment.

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Trade and Investment
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9. Lower Chamber Approves Free Trade with Ukraine

On October 5, the House of Representatives of the Belarusian
National Assembly voted to ratify an agreement between Belarus and
Ukraine on free trade and a related protocol. Belarus and Ukraine
signed the accord 1992, but the Belarusian parliament did not
ratify it because of language differences in Belarusian and
Ukrainian versions. A follow up protocol, signed during last
year's visit to Minsk by Ukrainian Prime Minister Yuriy Yekhanurov,

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clarified the agreement. Ukraine is Belarus' fourth largest
trading partner.



10. Lawmakers Discuss Ending Seizures for Petty Smuggling

On October 5, members of the Belarusian parliament's lower chamber
introduced a bill that would ban the seizure of vehicles involved
in the smuggling of goods valued at less than USD 580. The draft
amendments to the Administrative Offenses Code carry fines for the
offense. They would establish a fine of up to USD 724 for
individuals, USD 2,172 for sole entrepreneurs, and USD 11,590 for
other legal entities. According to State Customs Committee Head,
Aleksandr Shpilevsky, the legislation is aimed at making Belarus
more attractive for road carriers. He cited examples of drivers
having heavy-duty trucks seized for illegally bringing a few dozen
packs of cigarettes into the country. The bill corresponds to an
edict issued by President Lukashenko in June.


11. MTS Claims Belarusian Subscriber Base Up to 3 Million

On October 3, the Russian-Belarusian joint venture Mobile
TeleSystems (MTS),which operates GSM 900/1800 standard under MTS
and Jeans trademarks, reported that its subscriber base in Belarus
rose to 2.89 million active clients as of October 1, 2006, an
increase of 3.8 percent from the previous month. As of October 1,
MTS has 1,903 base stations, up from 1,843 base stations as of
September 1. MTS' services were available on 62 percent of
Belarus' territory to 90 percent of all Belarusians in 565 cities
and towns. MTS has 705 dealerships in 205 cities and towns of
Belarus. The capacity of MTS' network in Belarus is at 3.98
million numbers. Other Belarus' mobile operators are Mobile
Digital Communication (MDC),which operates GSM-900/1800 network
under the Velcom brand, and BelCel, which operates IMT-MC-450
(cdma2000) network. In December 2005, the third GSM operator,
BeST, started commercial operations. MTS launched its GSM-900/1800
network in Belarus in 2002 and is a joint venture between Russia's
largest mobile operator Mobile TeleSystems and Belarus' long-
distance operator Mezhdugorodnaya Svyazhe, which hold 49 percent
and 51 percent of shares, respectively.

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Domestic Economy
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12. Belarus' BeST Claims 11,000 Clients as of October 1

On October 3, mobile operator Belorusskaya Syet Telekommunikatsiy
(Belarus Telecommunications Network, or BeST) announced that it has
11,000 clients as of October 1, 2006, an increase of 4.8 percent
above the previous month. On August 1, the number of clients
increased 10.5 percent on the month. BeST provides service in
Minsk, Grodno, Vitebsk, Gomel, Brest, Bobruisk, and Mogilev. On
October 1 BeST had 79 base stations, up from 62 on September 1.
The company has 150 dealerships. Belarus' state-controlled fixed-
line monopoly Beltelecom created BeST and controls 25 percent of
BeST shares; the state-owned company Agat holds 75 percent.



13. GOB Projects Slower Long-term GDP Growth

On October 3, Belarusian Minister of Economics Nikolay Zaichenko
revealed that the GOB projects GDP growth between 49 and 56 percent
in 2006-2010 and 40-47 percent between 2011 and 2015. Zaichenko
emphasized that the government's principal goal for 2011 to 2015 is
to maximize the efficiency of the real sector, promote growth of
high-tech manufacturers, and encourage innovation throughout the
economy. Although the GOB forecasts that GDP will double between
2006 and 2015, Zaichenko predicted a long-term slowdown in GDP
growth. Nevertheless, over the next ten years, the GOB expects GDP
to grow between 100 and 130 percent, industrial output to increase
by 100 to 110 percent, and agricultural production to rise by 60 to
80 percent. Zaichenko also forecasted an inflation rate of 5
percent in 2010.

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Quote of the Week
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14. On October 5, former opposition presidential candidate
Aleksandr Milinkevich offered this assessment about the
opposition's responsibilities and democratic change in Belarus:

"I am an optimist and I expect this regime to last only a couple of
years, may be a year more. But everything will depend only on us.
One should not expect that prices will rise and the economy will
collapse abruptly, and we will enter riding white horses. A
revolutionary situation is not created by a call from an opposition
leader, it is the result of objective events."


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Stewart