EMBASSY MINSK WEEKLY POL/ECON REPORT - OCTOBER 16,

UNCLAS SECTION 01 OF 03 MINSK 001116 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PGOV PREL PHUM ECON KTDB EPET BO SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - OCTOBER 16, 2006 ¶1. The following are brief items of interest compiled by Embassy Minsk. TABLE OF CONTENTS ELECTIONS -------------- - Opposition Parties Agree on Campaign Cooperation (para. 2) - Authorities Approves Election Deadlines, Restrict Media (para. 3) CIVIL SOCIETY -------------- - Lower Chamber Approves Bill against "Extremism" (para. 4) INTERNATIONAL RELATIONS -------------- - Belarus Ends Pornography Case against Latvian Diplomat (para. 5) - Minsk Criticizes NATO PA Seminar on Belarus (para. 6) TRADE AND INVESTMENT -------------- - Russian Oil Supplier Cuts Crude by One Third (para. 7) - Joint Venture to Invest USD 30 Million for Oil Rack (para. 8) DOMESTIC ECONOMICS -------------- - Belarus' International Reserves Down 10.1 Percent (para. 9) - Belarus' Consumer Price Index Up 0.2 Percent (para. 10) - QUOTE OF THE WEEK (para. 11) -------------- Elections -------------- ¶2. Opposition Parties Agree on Campaign Cooperation At an October 11 meeting, the main opposition parties and several NGOs agreed to coordinate their campaigns for local elections, scheduled for January 14. The heads of the Belarusian Popular Front, the United Civic Party (UCP),the Belarusian Party of Communists, the Belarusian Social Democratic Party "Gramada," the Belarusian Women's Party "Nadezhda," the Malady Front youth organization, and other groups agreed that the elections were unlikely to be free. Nevertheless, they concurred on the need to use the campaign for promoting the opposition platform and expect to field about 850 candidates in the elections. In addition, the parties resolved to coordinate election observations and legal assistance to candidates and activists repressed by the government. The opposition leaders also called upon their parties' local chapters to participate in the formation of election commissions. ¶3. Authorities Approve Election Deadlines, Restrict Media On October 12, Belarus' Central Election Commission approved a series of deadlines for the January 14 local elections, including the formation of local election commissions, candidate nomination and registration, electioneering and vote counting. The commission also adopted a directive that formed a supervisory council that will oversee media coverage of the coming local elections and campaign ads placed by candidates. The GOB excluded independent media from the supervisory council. -------------- Civil Society -------------- ¶4. Lower Chamber Approves Bill against "Extremism" On October 11, the lower chamber of the Belarusian parliament House passed a bill aimed at preventing and combating "extremism." The draft law defines extremism as efforts by Belarusian and foreign individuals and organizations, including political parties and religious groups, to plan, finance, and/or commit acts aimed at the violent change of the "constitutional order," the establishment of illegal armed groups, and the conducting of terrorist activities. The bill would empower authorities to prosecute individuals and suspend organizations after two official warnings within a year. A suspended organization would be banned from using media outlets, organizing mass events and carrying out financial activities. Moreover, the draft law would ban the printing and distribution of extremist materials through media outlets. Deputy BKGB Chairman Vasiliy Dementey described the bill as a "usual international practice" in "almost every country concerned about its security." MINSK 00001116 002 OF 003 -------------- International Relations -------------- ¶5. Belarus Closes Pornography Case against Latvian Diplomat On October 10, Belarusian television reported that the GOB had closed its criminal case against a Latvian diplomat in Belarus. Belarusian authorities opened the case against the diplomat in July for allegedly distributing pornography following a police raid of his Minsk apartment. In August, state television aired sexually explicit video footage shot with a hidden camera in the diplomat's apartment in clear violation of the terms of the Vienna Convention. The diplomat in question departed Belarus in August and is not expected to return. ¶6. Minsk Criticizes NATO PA Seminar on Belarus On October 12, Belarusian Foreign Ministry spokesperson Andrey Popov criticized the October 13-24 NATO Parliamentary Assembly (PA) Seminar on Belarus in Vilnius on the grounds that "Minsk has always opposed the discussion of Belarus' problems abroad without Belarus' proper participation." Seminar participants included the 25 members of the Assembly, representatives of Belarus' opposition forces, NATO and EU officials, diplomats, and independent analysts, who discussed developments in Belarus since its fraudulent March 19 presidential elections. Belarus' status of associate member in the NATO PA was suspended in 1997 because of the increasingly undemocratic activities of the Lukashenko regime. On March 25, 2006, the Standing Committee of the NATO PA adopted a declaration that strongly condemned human rights violations and called upon NATO members "to actively support the democratic forces and promote the development of civil society in Belarus." -------------- Trade and Investment -------------- ¶7. Russian Oil Supplier Cuts Crude by One Third On October 9, independent media reported that Russia plans to reduce crude oil supplies to Belarus by 1.5 million tons during October to December. Russia's oil transport company Transneft originally planned to supply 4.5 million tons to Belarus in the period but announced it could not meet its target. In late September, Belarusian refineries had to reduce processing due to short supplies. For example, the Mozyr-based refinery processed only 14,000 tons of crude oil per day in early October, down from 23,500 tons. Russian and Belarusian negotiators remain at odds over how to calculate and distribute oil product duties. ¶8. Joint Venture to Invest USD 30 Million for Oil Loading Rack On October 12, a joint Belarusian-Russian venture between the Russian joint stock company NK RussNeft and Belarus' state-owned oil-producing monopoly Belorusneft announced plans to invest USD 30 million to construct an oil loading rack in the southeastern city of Mozyr. The loading rack will have a capacity of 7 million tons annually. In 2005, the joint venture "RussNeft" opened an export terminal near the Belarusian border with an annual capacity of 5 million tons, which may be extended to 7 million tons after gaining permission to exceed the crude supplies quota set by Russia's Transneft. RussNeft also plans to build an oil loading rack in the southeastern city of Rechitsa. Under the venture agreement, RussNeft will transfer to Belarus without compensation a 25 percent share in the LLC Oil Company RussNeft-Bryansk, giving Belorusneft operating control. Belarusian profits from the stake in RussNeft- Bryansk will be transferred to the GOB budget. -------------- Domestic Economy -------------- ¶9. Belarus' International Reserves Down 10.1 Percent On October 9, sources in the National Bank of Belarus revealed to independent media that Belarus' international reserves shrank by 10.1 percent to USD 1.2 billion in the first nine months of 2006. Foreign exchange reserves amounted to USD 950.8 million, dropping 14 percent in the first six months, while gold reserves rose by 6.9 percent to USD 203.1 million. In 2005, Belarus' international reserves reportedly increased by 68.3 percent to USD 1.3 billion. ¶10. Belarus' Consumer Price Index Up 0.2 Percent On October 12, the Belarusian Ministry of Statistics and Analysis reported that Belarus' consumer price index (CPI) edged up 0.2 percent in September after a 0.7 percent decrease in August. In September 2005, consumer prices increased 0.1 percent after decreasing 0.3 percent the previous month. Prices climbed 3.1 MINSK 00001116 003 OF 003 percent since January 1, less than the 4.6 percent increase from January to September 2005. Food prices rose 0.3 percent in September and 1.7 percent from January to September. Meanwhile, non-food prices went up 0.3 percent after rising 2.9 in the first nine months. Consumer services prices decreased 0.1 percent in September, a rise of 6.5 percent since January. The GOB projects Belarus' inflation to total seven percent in 2006. In 2005, CPI increased eight percent on the year, a drop from the 14.4 percent rise in 2004. -------------- Quote of the Week -------------- ¶11. While on hunger strike to express solidarity with imprisoned former opposition presidential candidate Aleskandr Kozulin, opposition activist Anatol Kulik offered the following appeal to pro-democracy forces: "What can one man do? Hunger strike? Yes, he can, but together we must take larger actions - meetings, pickets, strikes - in order to let the authorities perceive it as a political force, not the heroism of individuals." Moore