EMBASSY MINSK WEEKLY POL/ECON REPORT - SEPTEMBER 8,

UNCLAS SECTION 01 OF 04 MINSK 000994

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON EPET ENRG KTDB BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - SEPTEMBER 8,
2006

MINSK 00000994 001.4 OF 004



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

TABLE OF CONTENTS

LOCAL ELECTIONS
--------------

- Opposition Party Forms Bloc For Independence (para. 2)
- Opposition Coalition Secretariat In Operation (para. 3)
- Brest Opposition Questions Council Members (para. 4)

OPPOSITION POLITICS
--------------

- Milinkevich to Sue National Television (para. 5)
- Entrepreneurs Join Political Council (para. 6)
- Convicted Opposition Activist Moved to New Location (para. 7)

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

- Church Praying for Help Against Forced Eviction (para. 8)
- Police Search Activists' Apartments (para. 9)
- Partnership Families to File Suit Against Authorities (para. 10)

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

- Union Audit Results in Firings (para. 11)

TRADE AND INVESTMENT
--------------

- Embassy Hosts Luncheon With U.S. Businesses (para. 12)
- Breweries Up for Foreign Investment (para. 13)
- Belarus Oil Refinery Representation in Boston (para. 14)

DOMESTIC ECONOMICS
--------------

- State Monopoly to Lower Internet Prices, Eventually (para. 15)
- Gold Sales Increase (para. 16)

- QUOTE OF THE WEEK (para. 17)

--------------
Local Elections
--------------


2. (U) Opposition Party Forms Bloc for Independence

The Belarusian Popular Front (BPF) on September 4 agreed to
organize a "Forum for Independence" in October to unite all
opposition groups into a "Belarusian Bloc" or "Bloc for
Independence." According to BPF deputy chairman Aleksey
Yanukevich, the forum would unite political parties, NGOs, artists,
intellectuals, and prominent public figures to determine a common
approach to solving Belarus' current political and economical
situation. Participants would adopt a declaration and become
members of the Bloc's organizing committee. Single opposition
candidate Aleksandr Milinkevich would be the chair. The Bloc's
main objectives are to show citizens, the international community,
and Russia that Belarus' civil society and political groups will
preserve the country's independence.


3. (U) Opposition Coalition Secretariat In Operation

The United Democratic Forces (UDF) Political Council on September 5
adopted the composition of the UDF's coordinating body during local
elections, the Secretariat. Based on Milinkevich's pre-election
camp, the Secretariat consists of 24 members, including 16 from the
BPF, one from the Party of Progress, one from the Belarusian Social
Democratic Party (BSDP) Hramada, and one Malady Front member.
Chair of the Secretariat Viktor Ivashkevich noted that not all UDF
organizations were included because they failed to submit
candidates before the deadline. The Belarusian Party of Communists
(BPC) was allegedly preoccupied with reregistration of their party
while the United Civic Party (UPC) simply did not participate.


4. (U) Brest Opposition Questions Council Members

Head of the Brest regional BSDP Igor Maslovskiy on September 5 sent
letters to six pro-government members of the city soviet demanding
they explain how their tenure in office fulfilled their campaign
promises, improved their districts, and lowered the price of
utility services. Maslovskiy added that the local BPC would send
approximately 20 similar letters to other Brest city council

MINSK 00000994 002.4 OF 004


members.

--------------
Opposition Politics
--------------


5. (U) Milinkevich To Sue National Television

Milinkevich and his wife Inna Kulei announced on September 4 their
intentions to sue the state-controlled First National Channel (BT)
for slander. On August 23, BT's news program Panorama claimed
Milinkevich's son Vitovt was expelled from a training course in
Poland for starting a drunken brawl. On August 27, BT alleged that
Inna's son dodged the draft by filing a fake health certificate at
Brest's induction station. The last straw for Milinkevich was BT's
September 3 expose accusing Milinkevich's eldest son of buying
houses in their home village Bershty (Grodno Oblast) with Western
money. Milinkevich called the accusations absolute lies.
Milinkevich admitted he purchased two houses in Bershty, but said
they were old and abandoned and would be used as part of his new
agro-tourism business.


6. (U) Entrepreneurs Join Political Council

On September 5, the UDF Political Council granted seats to
representatives of a politically active market vendors group. In
an interview with independent online news source BelaPan,
Milinkevich welcomed the entrepreneurs' decision to work with
opposition forces and abandon their old practice of avoiding
politics. Milinkevich claimed the UDF would work with any
entrepreneur group that shares the opposition's goals.


7. (U) Convicted Opposition Activist Moved to New Location

Authorities on September 5 relocated opposition leader Nikolay
Statkevich, who is serving a two-year restricted freedom sentence
for organizing an unsanctioned rally, from Sitnitsa in the Brest
oblast to Pukhovichi in the Minsk oblast. The decision came after
a prosecutor "discovered" that Statkevich, a Minsk resident, had no
right to serve his term in the Brest oblast. Statkevich said his
father, who lives near Sitnitsa, requested that Statkevich serve
his time in Sitnitsa so that he could easily visit his son.
Statkevich's father is 79 and battling cancer. Statkevich
concluded that his political activities were the reason for his
transfer.

--------------
Civil Society
--------------


8. (U) Church Praying For Help Against Forced Eviction

Members of the New Life Church on September 4 began a week of fast
and prayers in a standoff against the Minsk city authorities'
eviction order. Parishioners meet daily at 19:00 at the New Life
Church to pray for God's assistance. The church's legal consultant
Sergey Lukanin expects Protestants throughout Belarus and those
from abroad to join the effort, noting that Christians from 63
countries have recently visited the church's website. On July 21,
the Minsk City Economic Court ordered the New Life Church to sell
its converted cow barn to the city for USD 17,500 and pay USD 250
dollars in litigation fees. The local authorities instructed the
church members to vacate the premises by September 1, but the GOB
has yet to enforce this ultimatum. Local authorities attempted to
gain access to the building on September 8, but were denied access
by the church's guard.


9. (U) Police Search Activists' Apartments

Police in Vitebsk and Minsk on September 5 seapched three
apartments belonging to youth activists, claiming the searches were
connected to the politically based criminal cases of activists
Kristina Shatikova, Denis Denisov, and Tatyana Yelovaya. Vitebsk
investigator Olga Zil authorized the searches at Zhanna Yamaikina,
Nikita Abramenko, and Yuriy Yegorov's apartments, seizing cell
phones, computers, and leaflets. Abramenko was taken to a police
station for questioning.


10. (U) Partnership Families To File Suit Against Authorities

During a September 5 press conference, Valeriy Dranchuk, father of
imprisoned election observer of the NGO Partnership Timofey
Dranchuk, announced plans to sue the authorities for violating
family members' human rights by denying relatives visits with the
jailed Partnership activists during pre-detention. Aleksandr
Shalaiko, a recently released Partnership activist, suggested the
suit be filed after the Minsk City Court decides on Partnership
leader Nikolay Astreiko's and Dranchuk's appeals on September 15.

MINSK 00000994 003.4 OF 004


On the same day, Astreiko's mother, Yevgeniya, was barred from
visiting her son at Volodarskiy Prison in Minsk. Prison
authorities claimed that Mrs. Astreiko's visitors pass expired and
told her to apply to the Minsk City Court chairman for an
extension. However, Astreiko's father was not allowed to see the
chairman and told that granting permission for visits would be
discussed after the September 15 appeal.

--------------
International Relations
--------------


11. (U) Union Audit Results In Firings

Chairman of Russia's Audit Chamber Sergey Stepashin told reporters
September 5 in Minsk that his agency's audits of the Belarusian-
Russian Union State budget resulted in "major staff replacements"
within Union agencies. Criminal cases were not pending, however,
because a joint-prosecutorial office of the Union does not exist,
making it unclear to which prosecutors, Belarusian or Russian, the
evidence should be sent to. In 2004, Stepashin ruled that funds
going to the Union State budget were missing or misappropriated.

--------------
Trade and Investment
--------------


12. (SBU) Embassy Hosts Luncheon For U.S. Business Representation

Charge Jonathan Moore September 7 hosted a luncheon with 25
representatives of U.S. businesses. The business people explained
to Emboffs the peculiarities of Belarusian regulatory requirements,
the entry of Russian investors into the country, their successes
and failures, and their mixed expectations for the Belarusian
economy. Charge stressed that one of the Embassy's
responsibilities is to assist U.S. business in Belarus when needed.
The business leaders thanked Charge for the luncheon and requested
that the Embassy host similar events in the near future.


13. (U) Breweries Up For Foreign Investment

The Presidential Administration's press service September 5
announced plans to hold an open investment tender to sell stakes in
brewing companies. Priorbank, the largest private bank in Belarus,
has managed the state's shares in the largest breweries since 2003.
After a meeting with Priorbank CEO Sergey Kostyuchenko, Lukashenko
decided breweries were ready for foreign investors. According to
Kostyuchenko, three of the world's leading brewing companies
submitted offers, although he failed to identify the companies or
announce when the tender will be held.


14. (U) Belarus Oil Representation In Boston

An official with the state-run petrochemical industry Belneftekhim
September 5 reported that the company would open a trade
representation office in Boston in mid-September. According to the
official, trade representations are part of Belneftekhim's plan to
increase sales while reducing middlemen. Belneftekhim has
representation offices in Russia, Ukraine, Latvia, Germany and
China, and trading companies in Russia, Ukraine, and Latvia. The
company intends to open trading companies in Germany, China, and
Lithuania and 15 representation offices in the Netherlands, Poland,
Iran, Turkey, Argentina, and China. Belneftekhim controls 41
companies and accounts for 35% of Belarus' exports.

--------------
Domestic Economy
--------------


15. (U) State Monopoly To Lower Internet Prices, Eventually

On September 5, Deputy Minister of Communications Vladimir Teslyuk
claimed Belarus' telecommunications monopoly Beltelecom would lower
its internet access rates. Teslyuk admitted that Beltelecom's
rates were high, but commented that this was Beltelecom's policy.
However, Beltelecom was working close with the Ministry of
Communications on the issue and Teslyuk predicted Beltelecom's
rates would decrease "when the time comes."


16. (U) Gold Sales Increase

The National Bank of Belarus on September 7 reported that sales of
gold bars increased 360% year-on-year to 802.9 kilograms. The
National Bank sells gold bars to retail customers in 1, 5, 10, 20,
50, 100, 250, 500, and 1000-gram increments.

--------------
Quote of the Week

MINSK 00000994 004.4 OF 004


--------------


17. (U) During his two-day visit to Minsk, Iranian Foreign Minister
Mottaki stated that Western states had "no right" to demand Iran
close its nuclear program, adding that Belarus shared this opinion:

"Nuclear powers that used nuclear weapons against the cities of
Hiroshima and Nagasaki have no right to demand other states be
prohibited from possessing nuclear technology."

MOORE