GRODNO/VOLKOVISK TRIP HIGHLIGHTS

UNCLAS MINSK 000556

SIPDIS

SIPDIS
KIEV FOR USAID
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL PHUM EINV BO
SUBJECT: GRODNO/VOLKOVISK TRIP HIGHLIGHTS

REF: 05 MINSK 1383


1. (SBU) Summary: On May 16-17, Ambassador toured the Grodno
oblast in the western part of Belarus, stopping first in
Grodno and then in Volkovisk. Recently released political
prisoner Levonevskiy described his deplorable prison
conditions. Free trade unionists noted increasing GOB
pressure on independent trade unions. Independent Union of
Belarusian Poles (UBP) activists described their ongoing
struggles with the state-supported UBP. Local Grodno and
Volkovisk authorities on the other hand detailed the positive
effects large government investments have had on their
localities. Ambassador toured newly renovated factories in
both cities and Grodno's Free Economic Zone and spoke to a
gathering of university students in Grodno. End Summary.

Released Activists Discuss Prison Conditions, Trade Unions
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2. (SBU) On May 16, Ambassador met with former political
prisoner Valery Levonevsky, who had just finished his
two-year prison sentence (for defaming the president) the day
before. Levonevsky described the deplorable conditions in
which he and other prisoners are forced to live, including
the lack of nutritional meals and medical and legal
assistance. He plans to promote prisoners' rights and inform
the international community of the poor conditions and
treatment of Belarusian prisoners. Levonevsky, who looked
healthy although he claimed of a heart ailment, intends to
resume his trade union activities but said needs to first
focus on his family and restoring his health.


3. (SBU) Levonevsky opined the opposition did the best it
could during the elections given the circumstances it faced
but conceded Lukashenko's victory was to be expected. He
stressed democratic forces need international support.
Levonevsky believes the situation in Belarus can only be
changed from the outside, primarily through Western pressure
on Russia. Ambassador responded that change would probably
happen when enough Belarusians were ready to make it happen
and not as a result solely of foreign pressure.


4. (SBU) Independent trade union leader and current city
council member (one of the few independents to have been
elected to a local council) Sergey Antusevich noted the
increasing pressure his union faces from the authorities. He
claimed the GOB is determined to close his chapter of the
Free Trade Union at the Grodno's largest state enterprise -
the huge petrochemical fertilizer plant AZOT. Authorities
and AZOT administrators recently took away the Union's
office, leaving the Union without a legal address and, hence,
imperiling its registration status. The Union has already
lost 300 members due to the authorities' pressure on them to
quit the union or be fired. However, Antusevich maintained
his union would persevere, even if it is forced to work
underground.

UBP and Journalist Describe Increased GOB Pressure
-------------- --------------


5. (SBU) Former Union of Belarusian Poles (UBP) leader
Tadeusz Gavin told Ambassador that support in the Polish
community for the state-backed UBP is very low. According to
Gavin, government-sponsored founding conferences in the
regions attracted single-digit numbers of activists, as
compared to hundreds who participated under the popularly
elected UBP leaders. He said activists who stayed with the
state-backed UBP have been compromised and forced to sign
declarations in support of Lukashenko. UBP spokesperson
Andrzei Pisalnik asserted the GOB considers the independent
UBP to be a dangerous entity, since members are linked to
Western democratic traditions and principles.


6. (SBU) Independent reporter Natalia Makushina informed that
government pressure forced her to suspend the printed edition
of her independent newspaper, "Birzha Informatsiy" and create
an online version. Makushina called for international
support of Belarusian independent electronic media as one way
to keep independent news and information flowing to
Belarusians.

City Leaders Boast of Grodno's Civil and Economic Progress
-------------- --------------


7. (SBU) Chairman of the Grodno executive committee,
Aleksandr Antonenko, his deputy Aleksandr Sivtsov, Grodno
State University Rector Evgeny Rovba, and GrodnoInvest
Director Sergey Tkachenko joined Ambassador for lunch where
they discussed a wide range of political, economic and social
issues. Mayor Antonenko claimed the recent presidential
elections in Grodno passed peacefully reflecting the stable
economic and political environment in the city. He asserted
that Grodno native son and former deputy mayor and now
opposition presidential candidate Milinkevich had visited
Grodno several times during the campaign without incident but
did not manage to obtain much local support. Others at the
table pointed to the area's rapid economic growth especially
in the furniture and textile industries. The social front
was "stable" as well.

Grodno Cemetery Issue Resolved
--------------



8. (SBU) Ambassador inquired about construction at the Grodno
Stadium built on a Jewish cemetery. The Mayor maintained
construction ended long ago and the situation with unearthed
remains that he admitted had been handled poorly in the past,
had now been "worked out amicably" with the local Jewish
community. This was confirmed later in a chance encounter
with local Jewish leader Korzh and when Ambassador drove by
the stadium area. Korzh claimed the city authorities had
already set a date to inaugurate the stone monument near the
stadium memorializing the cemetery in fulfillment of their
promise to ensure residents knew the history of the site.

Investment on the Rise in Grodno
--------------


9. (SBU) Ambassador visited an American-owned meat packaging
material factory and a Polish-Belarusian joint venture as
part of his tour of the Grodno Free Economic Zone (FEZ)
GrodnoInvest. GrodnoInvest Director Sergey Tkachenko
described the increased business activity and construction in
the region, which he credited mainly to the success of
Grodno's FEZ. According to Tkachenko, Grodno's FEZ is the
youngest of all the FEZ's in Belarus, but already has 33
resident business and significant foreign capital investment.



10. (SBU) Mayor Antonenko told Ambassador that the level of
competition to attract foreign investors is very high among
the FEZs in Belarus. While the investment conditions among
the FEZs are standardized, infrastructures and locations
differ. Antonenko considered the competition and diversity to
be good for investors because it gives them more options.
Antonenko considered the Grodno FEZ's advantage to be its
close proximity to "Europe," i.e. Poland. According to
Antonenko, Poland is the Grodno FEZ's biggest investor while
Russia investments predominate in the more eastern FEZs.


11. (SBU) When Ambassador raised foreign investors'
hesitations to invest in Belarus due to unease about
corruption and the frequent nationalization of private
companies, Antonenko dismissed Ambassador's concerns, saying
"we play by the rules in the Grodno FEZ" and corruption is
"not a problem here." Antonenko told Ambassador that foreign
investors should not hesitate to invest in the FEZs despite
Golden Share Rule concerns. (Note: The Golden Share Rule
allows the government under certain circumstance to
nationalize a privately owned company if the government owns
as few as one share of stock in the company (reftel).)
Antonenko admitted, however, that the FEZ directors would
have to support the GOB in a dispute between the authorities
and a foreign company, but that the company could use the
judicial system to resolve the problem.

Quiet Q and A with Students
--------------


12. (SBU) Ambassador visited Grodno State University and met
with faculty and students. After speaking to students about
U.S. policies, few in the audience took up the offer to ask
questions under the watchful eyes of the many university
officials who were present in the room. The questions
focused primarily on student exchange programs indicating
great interest in travel, work and study in the U.S. The
students perked up only when Ambassador starting speaking in
the unfortunately rarely heard Belarusian language. In an
additional effort of public outreach, Ambassador donated
books and library materials to the Grodno American Corner and
gave an interview to the local state television station,
which good-naturedly asked the usual "loaded" questions.

Authorities Present a Peaceful and Prosperous Volkovisk
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13. (SBU) Ambassador stopped in the Grodno regional city of
Volkovisk, the site of the 2003 fall "Dazhinki" harvest
festival. Ambassador met with the ebullient Regional
Executive Committee Representative Mikhail Saveliev and his
many minions. An animated Saveliev outlined Volkovisk's
progress and developments and claimed it is the fastest
growing city in the region after Grodno itself. Saveliev
said the regional executive committee poured billions of
rubles into economic, education, cultural, and civic
programs, including funds to modernize factories, especially
in the meat and milk industries, and to purchase agricultural
equipment.


14. (SBU) In addition to being a prosperous city, Saveliev
stressed the well-balanced interaction of all groups in
Volkovisk. He claimed relations among religious groups and
with the government were amicable and noted that the
government funded the construction and renovation of
Protestant, Orthodox and Catholic buildings in 2005. He
added that registered political parties coexist peacefully
and the presidential elections were conducted smoothly.


15. (SBU) In good Soviet tradition Saveliev took us on a full
tour of the city and its environs to demonstrate the positive
effects of government investment in Volkovisk, including
tours of museums, a newly built House of Culture, rural
hospital and central hospitals, the Bellakt milk factory, the
newly installed municipal fountain, and a recently renovated
rural school. A state-media cameraman studiously filmed it
all. The long day in Volkovisk ended with obligatory toasts
to peace and friendship "and to the wisdom of our
presidents."

Comment
--------------


16. (SBU) Saveliev reflects the type of executive Lukashenko
has tried to breed in Belarus - a firm believer in top down
vertical management and the preeminent role of the state in
all things. Saveliev tried to present Volkovisk as the
"model medium size Belarusian city," benefiting from the
economic success and social progress of government control
and hand-outs although he was quick to say that most of the
funds come from the profits of the state firms and farms that
answer to him. While it was clear that money had been
invested in the city, it is not evident where that money came
from. But all that glitters is not gold in Volkovisk; while
we were getting our grand tour, Ambassador's driver learned
from his Volkovisk counterpart that the city has its full
share of economic and social problems. Ambassador had raised
various problems with Saveliev as he did with Grodno's mayor
but got much the same response - "that's no problem" -- an
answer no doubt they give to state inspectors from Minsk.
Both cities
present an image of highly state-controlled growth but none
of the free market commercial boom one sees in neighboring
Poland and Lithuania. But the potential in Belarus is clearly
there. Oh yes, state media cameramen and journalists,
accompanied at a distance by the head of city's ideology
department, hounded us in Grodno when we visited civil
society representatives. In Volkovisk, a state media
cameraman assiduously filmed our every step.
Krol