PINSK VISIT NOT IDEOLOGICALLY PURE

C O N F I D E N T I A L SECTION 01 OF 03 MINSK 000582

SIPDIS

SIPDIS
KIEV FOR USAID
DEPT ALSO FOR EUR/OHI

E.O. 12958: DECL: 06/02/2016
TAGS: PGOV ECON PHUM KNAR BO
SUBJECT: PINSK VISIT NOT IDEOLOGICALLY PURE

REF: A. 05 MINSK 1126

B. MINSK 393

Classified By: DCM CONSTANCE PHLIPOT FOR REASONS 1.4 (B, D)


1. (C) Summary: On May 24 and 25 DCM and Econoff visited the
southern cities of Pinsk, Beryoza and Beloozyersk, as well as
a newly discovered Holocaust mass grave near Bronnaya Gora.
Local activists in Beryoza seemed preoccupied with their
problems with the BKGB, but activists in Beloozyersk are
already planning for 2007 local elections. Most meetings in
Pinsk were held with the knowledge and approval of local
officials, who however grew angry when Emboffs deviated from
the official plan and met a local independent journalist. In
Pinsk Emboffs toured a textile factory partially owned by
Belarus' security services, spoke with the mayor, delivered a
donation to the American Corner, and listened to the many
problems faced by a local American investor. Throughout the
Pinsk visit Emboffs were accompanied by a local ideological
officer, a state television crew, uniformed police and
presumed members of the BKGB. Emboffs did not get a chance
to watch or play Pinsk's premier sport, motoball (soccer
played from a
motorcycle). End summary.


Too Much Love from the GOB in Pinsk
--------------


2. (U) DCM and Econoff visited the southern cities of
Beryoza, Beloozyersk and Pinsk May 24 to 25. The bulk of the
trip was spent in Pinsk, where local authorities reacted to
the visit with a welcoming but heavy hand. A city
ideological officer, a marked police vehicle, and a state
television crew accompanied Emboffs at all times. They were
periodically joined by several plainclothes people Emboffs
suspect were BKGB. At times local authorities had four
vehicles accompanying the embassy's single car. The visit
was relatively frictionless, with Emboffs holding only city
"approved" meetings, until the end, when Emboffs stopped off
in a caf to speak with an independent journalist (who was
afterwards immediately questioned by both state media and
state security). After that meeting the ideological escort
turned frosty, the state camera crew asked DCM why she held a
"conspiratorial meeting" with "a social-democrat," and the
police vehicle escorted Emboffs at great speed to the city
limits.


Pinsk's Confident Mayor
--------------


3. (U) Emboffs met with the mayor of Pinsk, as well as his
deputies for social and business affairs. The mayor
explained that Pinsk is Belarus' tenth largest city with
130,000 inhabitants, and that it is growing due to domestic
migration. Pinsk is an industrial city, and local industry
provides most of the city government's USD 20 million in
monthly tax revenue. The largest company is the private
Pinskdrev furniture factory, while small businesses, mostly
in construction and hair salons, provide 15% of tax revenue.
The city spends half of its budget on health care, but is
also building a new university (funded by the National Bank
of Belarus),and recently opened a restored historic theater.
Pinsk also is proud to host Europe's only dedicated motoball
stadium -- a form of soccer played on motorcycles. When
asked about NGOs, the mayor's staff recited the registered
political parties in the region, but added that the state
really provides for all needs, so NGOs are not necessary.
The mayor explained that
Pinsk region prides itself on its agriculture, and imports
John Deere tractors.


Textiles for State Security
--------------


4. (SBU) Local officials then accompanied Emboffs on tours of
a local joint venture textile factory and an outlet store for
a state-owned textile plant. The management explained the
state factory was currently not working due to the transition
between seasons. The management proudly showed off the
factory's clothing, which was of poor quality and out of date.


5. (U) Emboffs than toured an Austrian/Belarusian joint
venture that produces sportswear for Champion Europe. This
factory uses modern equipment, had a small staff, and clearly
produced quality fabric. The plant's manager explained the
plant was 60% owned by an Austrian investor and 40% by

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Minsk's Dynamo Sports Club. He added that Dynamo (which owns
Belarus' most successful soccer team and Minsk's largest
outdoor stadium, as well as other businesses) is owned by a
consortium of Belarus' security services, including the
Ministry of Defense, BKGB, State Customs Committee, and
Ministry of Interior.


Hardships for an American Investor
--------------


6. (C) Emboffs met with Mark Homnick, an American whose
company Silicon Materials has been producing silicon wafers
for export to the U.S for twelve years. Although his company
is profitable, Mark stated that he constantly faces
bureaucratic problems from the government that hamper his
business. He explained that all companies in Belarus face
such problems, he has never been singled out for being a
foreigner. When he initially invested in Belarus, he entered
into a joint venture with a failing Belarusian silicon wafer
manufacturer, which has caused numerous problems. His
state-owned partner contributes nothing to the business.
Last year Mark had to install a USD 100,000 water
purification system to remove contaminants from his chips.
His partner tried to block this upgrade, as it would throw
off the ownership ratio of how much each party had
contributed to the company. To overcome this hurdle and
avoid accidentally investing in his own firm, Mark imported
the goods as "humanitarian assistance" to his c
ompany. Although he said local officials are sympathetic,
they explained he now faces massive fines and possibly jail
for making an illegal donation to a Belarusian entity, under
recently amended laws designed to prevent foreign donors from
aiding political NGOs. Mark thinks he can overcome this
barrier.


7. (C) Mark also wants to bring in new equipment to double
production, but his local partner is trying to prevent this
move, and he faces taxes worth more than the equipment
itself. To bypass these problems he is contemplating
creating a shell company to import and legally own the new
equipment. Mark stated that all companies in Belarus face
continuous state inspections, extremely high taxes, and a
stifling legal environment. For example, Mark recently
bought a used building and wants to renovate and modernize
the space. However, under Belarusian law any renovation that
costs more than 10% of the value of the building is
classified as new construction and requires expensive fees
and taxes. Because of laws designed to protect domestic
industry, Silicon Materials cannot do any contract work for
local manufacturers, even recently when the state-owned
silicon chip company Integral wanted Silicon Materials' help
in a process for which Integral did not have the proper
equipment. The GOB refused to allow this
cooperation.


8. (C) Mark said he could easily double his production if the
GOB would slightly ease the regulatory burden. Even though
he loves Pinsk (and married a local),he claimed he would
possibly not have entered the Belarusian market if he knew he
would face so many problems. Mark has considered moving his
company to Poland, but stated the GOB would never let him
export his machinery.


9. (C) Mark also claimed that just before the March
presidential elections he received an invitation from the
mayor to a meeting of all regional enterprise directors to
"prepare for" the elections. He went to the meeting, but the
room grew silent when the American entered. An obviously
embarrassed mayor asked if Mark had been invited, and then
politely asked Mark to leave, claiming the meeting was only
for directors of state enterprises.


Ideologically Unpure Journalist
--------------


10. (U) In other meetings in Pinsk, DCM donated additional
books and equipment to an American Corner in the local
library, spoke to 35 local English students, gave a short
interview to our state media escorts, and met with officials
at the local Catholic monastery. In the meeting that
provoked the ire of our escorts, Emboffs spoke with a local
independent journalist. His newspaper, Mestovoy Chas, has a
weekly circulation of 1,400. This fell from over 2,000 after
the state blocked their access to the state postal and kiosk
distribution systems. During the election period this
journalist went to jail twice, once for five days for
allegedly swearing in public and once for six days for

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alleged hooliganism, although he claimed he was arrested
while bringing his daughter to school. He explained that
Pinsk residents are mostly worried about economic matters,
such as natural gas prices and salaries, and are not much
interested in politics. His paper survives with difficulty,
but he claimed that many officials i
n local government read his paper for a more accurate report
of what is happening in the region. He added that opposition
newspapers Narodnaya Volya and Nasha Niva are sometimes
available in Pinsk.


Holocaust Mass Grave Found
--------------


11. (U) On the way to Pinsk, outside the village of Bronnaya
Gora, Emboffs met with several local women who, after
diligent research, uncovered a mass grave dating from the
Holocaust. They had discovered that the occupying Germans
gathered the local Jewish population, several thousand
people, and shot and buried them in a nearby forest. The
group has permission from local authorities to erect a
monument on the site, but is looking for funding. DCM
promised to pass their story along to possibly interested
American groups.


Despair in Beryoza
--------------


12. (C) Last September Econoff visited the local opposition
in Beryoza and found a vibrant and active group (ref A).
Emboffs met with the same group on May 24. They remain
active, and were collating a local underground independent
newspaper during the visit. However, Emboffs this time found
them to be preoccupied with the problems they face from the
regime. They explained the BKGB has questioned most of them,
using the pretext of investigating the Partnership arrests
(ref B). All claimed the BKGB follows them and listens to
their phones, as well as to phones of their relatives. The
BKGB even called one activist's underage daughter to ask why
she allows her mother to make political calls on her phone.
The group repeatedly commented that the BKGB was listening to
the current conversation and had a vehicle outside watching.
Activists had been brought to court three times for
distributing an unregistered newspaper, and currently face a
fine of BYR 2.3 million (USD 1,070) for defamation after they
reported
the commander of the local airbase was dishonorably
discharged for criminal activity. Unfortunately for the
activists, this commander was also head of the local
pro-Lukashenko Communist Party. They all commented that
regime pressure had increased after the election was over,
rather than lessening as expected. The group also told more
of the same stories Emboffs hear throughout Belarus of
opposition activists arrested, election observers not being
allowed to observe vote counting, and of the local election
commission member who refused to sign the falsified election
protocols.


But Beloozyersk Still Upbeat
--------------


13. (C) In contrast to Beryoza, local activists in
Beloozyersk were more focused on what they are doing, rather
than what the regime is doing to them. Beloozyersk activists
told Emboffs they have held several post-election meetings to
start planning for the 2007 local elections. They also
conducted a poll of 500 local residents and found that 63.8%
said they voted for Lukashenko, while 20.3% voted for
Milinkevich (versus official nationwide results of 83% and 6%
respectively). Local activist Yury Gubarevich explained that
he thought local residents seemed more supportive of the
opposition in 2001 and 2004 elections than in 2006. The
Beloozyersk activists also run a regional resource center
that publishes a bi-weekly newspaper with 1,350 copies, and
helps a local women's group and several groups in other
cities publish their newspapers.
Krol