EMBASSY MINSK WEEKLY POL/ECON REPORT - December 4, 2006

UNCLAS SECTION 01 OF 03 MINSK 001245

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - December 4, 2006



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

TABLE OF CONTENTS

CIVIL SOCIETY
--------------

- Milinkevich Meets Bush, Faces Two Months in Jail (para. 2)
- Union of Left-wing Parties Favors Election Boycott (para. 3)
- Youth Activists Attempt to Demonstrate During CIS Summit (para.
4)
- Foreign Travel Permits Could Be Abolished in 2007 (para. 5)
- Neo-Nazis Want to Stop Belarusian-Language Theater (para. 6)
- Brest Jewish Memorial Vandalized (para. 7)
- Clinton Bench Damaged in Another Vandal Attack (para. 8)
- Catholic Community Goes on Hunger Strike (para. 9)
- Over 130 Employees to Quit Pro-GOB Trade Union (para. 10)

INTERNATIONAL RELATIONS
--------------

- Belarus Ready for European Union "Consultations" (para.11)
- NATO Helps Belarus Destroy Landmines by December 5 (para. 12)
- Authorities Allow UN Aid Fund to Provide More Money (para. 13)

ECONOMICS
--------------

- Foreign Investment Up 150 Percent (para. 14)
- Refinance Rate Cut to 10 Percent (para. 15)

- QUOTE OF THE WEEK (para. 16)

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CIVIL SOCIETY
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2. Milinkevich Meets Bush, Faces Two Months in Jail

On November 28, opposition leader and former presidential
candidate Aleksandr Milinkevich met briefly with U.S. President
George W. Bush on the margins of the NATO Summit in Riga to
discuss the political and human rights situation in Belarus.
President Bush said that the U.S. would continue to support
opposition groups in Belarus and expressed hope that democracy
would soon be restored in the country. The following day, Minsk
airport authorities detained Milinkevich for approximately four
hours upon his return and charged him with deliberately crossing
the border using a forged document, a charge that carries a jail
term of up to two months or a heavy fine. Upon his initial
departure from Belarus en route to Riga, Milinkevich had
mistakenly given Belarusian border guards his son's passport.


3. Union of Left-wing Parties Favors Election Boycott

On December 2, the Belarusian Party of Communists (BPC) approved
the Declaration of the Formation of the Union of Left-wing Parties
at a special convention held in Minsk. The declaration united the
BPC party, the Belarusian Social Democratic Party (BSDP)
"Gramada," and the Belarusian Women's Party "Nadzeya." Claiming
that the elections would be a farce, they also recommended pro-
democratic contenders to withdraw from the race (septel).


4. Youth Activists Attempt to Demonstrate During CIS Summit

On November 28, 13 youth opposition activists staged a
demonstration during a meeting between President Lukashenko and
Vladimir Putin on the margins of the CIS Summit in downtown Minsk.
The activists formed a line and displayed images of imprisoned
youth leaders Dmitriy Dashkevich and Artur Finkevich. Police
dispersed the demonstrators after a few minutes, but there were no
reports of arrests.


5. Foreign Travel Permits Could be Abolished in 2007

On November 28, State Border Troops Committee Chairman Aleksandr
Pavlovskiy announced that Belarus' system of foreign travel
permits could be abolished by December 30, 2007. In 2002, the
Constitutional Court recommended abolishing the travel permit
system by January 1, 2006, since the requirement infringes on
citizens' constitutional right to freedom of movement. The GOB
later requested that the Court extend the deadline on the grounds
that it lacked a computer database of persons subject to travel
restrictions.


6. Neo-Nazis Want to Stop Belarusian-Language Theater

On November 29, Viktoriya Dashkevich, head of a puppet theater in
the northern city of Vitebsk, reported that the neo-Nazi Russian
National Unity group sent her a letter demanding that the theater

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stop staging Belarusian-language plays and translate all plays
into Russian on the grounds that Belarus will soon become a part
of Russia. Dashkevich plans to file a complaint with law-
enforcement agencies over the letter.


7. Brest Jewish Memorial Vandalized

On November 30, vandals burned flowers and wreaths on the Brest
Jewish memorial dedicated to the extermination of the Brest
ghetto, leaving the monument partially blackened by the smoke and
flames. Police are investigating the incident but have not opened
a criminal case. This is the sixth act of vandalism at the
monument since its erection in 1992.


8. Clinton Bench Damaged in Another Vandal Attack

On December 1, independent media reported that vandals damaged the
Clinton Bench, a granite monument in the Kurapaty Stalin-era
massacre site just outside Minsk. The vandals threw the bench's
granite slab off its concrete supports and scattered the flowers
and candles that were placed on the bench. The bench, frequently
attacked by vandals, was donated by President Bill Clinton in 1994
on behalf of the United States.


9. Catholic Community Goes on Hunger Strike

On December 1, priest Aleksandr Shemet and 11 women of the Blessed
Virgin Mary Mother of Mercy community in Grodno commenced a hunger
strike in protest against the local authorities' refusal to grant
them permission for the construction of a church. The community
currently has more than 8,000 members and is forced to worship in
two separate chapels that can only accommodate 320 people at a
time. Shemet noted that embattled Protestant New Life Church
inspired him to take such measures.


10. Over 130 Employees to Quit Pro-GOB Trade Union

On November 29, independent media reported as many as 130
employees of a state-run paper mill in the eastern Gomel region
announced plans to quit the pro-government Forestry Industry
Workers Union. The employees are dissatisfied with the amount of
their pay, workplace conditions and the insufficient supply of
work gear. The company claims that it cannot afford to offer new
benefits or better wages because the mill's products have been
priced out of the Russian market.

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INTERNATIONAL RELATIONS
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11. Belarus Ready for European Union "Consultations"

On November 27, Presidential Administration Deputy Head Natalya
Petkevich stated that Belarus is ready to begin "consultations"
with the European Union on the GOB's progress on implementing ILO
recommendations for labor reform. Petkevich noted that the GOB
has not received a reply to its letter to the European Commission
in 2005 following the start of procedures for withdrawing Belarus
from the benefits of the Generalized System of Preferences. On
November 21, the European Commission announced that the EU would
offer more aid and trade to Belarus if the country demonstrated
progress on democracy and human rights.


12. NATO Helps Belarus Destroy Landmines by December 5

On November 29, independent media reported that Belarus plans to
complete the destruction of its entire stockpile of TNT-containing
anti-personnel landmines under the Ottawa mine ban treaty. The
NATO Maintenance and Supply Agency has funded a project in
Belarus, which destroyed approximately 295,000 TNT-containing
mines and converted several thousand of these mines into command-
detonated mines which are not banned by the treaty. The last
remaining 240 TNT-containing mines are to be detonated on December

5.


13. Authorities Allow UN Aid Fund to Provide More Money

On November 29, the Ministry of Economics has reportedly allowed
the United Nations Global Fund to Fight AIDS, Tuberculosis and
Malaria to provide additional funds for its HIV/AIDS prevention
and treatment project launched in late 2004. The Global Fund
reportedly pledged to provide USD 9.5 million for the second stage
of the project scheduled to start on December 1. It made
available USD 6.8 million for its first stage. The ministry
reported that every person living with the virus has access to
treatment in Belarus. As many as 7,660 Belarusians have been
diagnosed as HIV-infected as of early November 2006 with only
about 500 HIV-infected people in Belarus receiving anti-retroviral
treatment under the project.

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ECONOMICS
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14. Foreign Investment Reported Up 150 Percent

On November 27, the Ministry of Economics reported that foreign
investment in Belarus increased 150 percent over the last year to
USD 2.8 billion from January through September. The share of
direct investment in all foreign investment inflows reportedly
totaled 18.7 percent, or 49.1 percent more than in the same period
of the previous year. The Ministry reported that loans accounted
for 80.2 percent of all direct investment inflows. Investment in
projects specified in the government's investment program totaled
USD 4.2 million in the first 10 months of 2006.


15. Refinance Rate Cut to 10 Percent

On November 29, independent media reported that the National Bank
of Belarus (NBB) will lower its base refinance rate by 0.5
percentage point to 10 percent on December 1. According to the
NBB, the reduction is aimed at making bank loans cheaper and is
possible due to the deceleration of inflation. Belarus' consumer
prices reportedly rose by 3.8 percent in January through October
of 2006, rising by 0.4 percent per month on average. In the same
period of the previous year, consumer prices increased by 5.6
percent, increasing by 0.5 percent per month on average, according
to official statistics.


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QUOTE OF THE WEEK
--------------


16. On November 30, while unveiling his party's municipal election
platform for local economic development, opposition United Civic
Party Chair Anatoliy Lebedko offered the following observation:

"We do not need a country going back to the past - a country where
officials and politicians set prices, share subsidies and appoint
leaders for us. We do not need an economy creating `phony'
statistics and luxury villas for `the people's servants."

Stewart