EMBASSY MINSK WEEKLY POL/ECON REPORT - APRIL 05, 2007

UNCLAS SECTION 01 OF 03 MINSK 000290 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PGOV PREL PHUM ECON EPET ENRG BO SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - APRIL 05, 2007 REF: MINSK 266 ¶1. The following are brief items of interest compiled by Embassy Minsk. TABLE OF CONTENTS INTERNATIONAL RELATIONS -------------- - Minsk Oil Extraction Deals Outside Russia-"Propaganda" (para. 2) - Latvia to Demand Compensation for Fuel Spill (para. 3) - Parliament Approves Visa-free Travel to Azerbaijan (para. 4) - Putin and Lukashenko Exchange Greetings (para. 5) - Belarus-Ukraine Cancel Border Guard Talks (para. 6) CIVIL SOCIETY -------------- - Non-GOB Writers Union Appeals Ban on Public Meetings (para. 7) - Regional Human Rights NGOs Evicted in Mogilyov (para. 8) INTERNATIONAL TRADE AND INVESTMENT -------------- - Russia Concerned over Beltransgaz Price Reductions (para. 9) - GOB Predicts Job Holders up 10-11 Percent by 2010 (para. 10) DOMESTIC ECONOMY -------------- - PM Says Belarusian Economy Immune to Outside Shocks (para. 11) - GOB Predicts Job Holders up 10-11 Percent by 2010 (para. 12) SOCIETY -------------- - GOB Considers Construction of Antarctic Station (para. 13) QUOTE OF THE WEEK (para. 14) -------------- INTERNATIONAL RELATIONS -------------- ¶2. Minsk Oil Extraction Deals Outside Russia-"Propaganda" During a press conference on March 30, Russian Ambassador to Belarus Alexander Surikov stated that Minsk's announcement of plans to extract oil in Venezuela, Azerbaijan and Iran was an act of "propaganda." He noted that before Belarus can proceed with such plans, it must first win bidding competitions in those countries. Furthermore, he added that Belarus could extract oil from Russia "without problems," where the infrastructure necessary for transporting extracted oil already exists. ¶3. Latvia to Demand Compensation for Fuel Spill On March 30, Belarusian independent media reported that the Latvian government will demand compensation from Minsk for damage caused by diesel fuel leaked from a Russian-owned pipeline in northern Belarus. The leak, first reported on March 23, released an estimated 1,000 tons of fuel into the Western Dvina River and its tributary, the Ulla (reftel). As of April 2, diesel covered 100 kilometers of shoreline. The pipeline carries petroleum products to Latvia's Ventspils seaport. �A;¶4. Parliament Approves Visa-free Travel to Azerbaijan On April 2, the Belarusian National Assembly's lower chamber ratified an agreement to allow visa-free travel with Azerbaijan. Belarusian Deputy Foreign Minister Viktor Gaysenok expressed hope that the accord would increase economic cooperation and political and cultural dialogue. Both countries may still bar a citizen of the other country from entering its territory or reduce the period of stay without explanation. ¶5. Putin and Lukashenko Exchange Greetings On April 2, President Lukashenko and Russian President Putin exchanged greetings on the occasion of "The Day of the Unity of the Peoples of Belarus and Russia." Celebrated on April 2 each year, the day commemorates the 1996 agreement between Presidents Lukashenko and Yeltsin that formed the Belarusian-Russian Community. On April 2, 1997 the two leaders signed another accord that ostensibly transformed the community into a union. In his greeting to Putin, Lukashenko observed that "the objective need for rapprochement between Belarus and Russia becomes increasingly tangible with every year that passes". ¶6. Belarus-Ukraine Cancel Border Guard Talks MINSK 00000290 002 OF 003 On April 3, Belarus' State Border Troops Committee Chair Aleksandr Pavlovskiy and Ukrainian Border Guards Chief Mykola Lytvyn cancelled their talks scheduled for April 3 and 4. Pavlovskiy and Lytvyn were expected to discuss Belarusian-Ukrainian border issues. The officials reportedly put off the talks because of the political crisis triggered by Ukrainian President Viktor Yushchenko's April 2 decision to dissolve Ukraine's parliament. -------------- Civil Society -------------- ¶7. Non-GOB Writers Union Appeals Ban on Public Meetings On March 30, the independent Union of Belarusian Writers (UBW) filed an appeal against the Education Ministry's ban on GOB institutions from holding pubic meetings with its members. The ban declares that any public meetings with writers and other cultural events require pro-GOB writers' union's consent in order "to propagate ideology and educate youth effectively." The UBW criticized the ban as illegal, restrictive, and aimed at limiting contacts with writers who openly criticize and voice discontent over GOB policies. ¶8. Regional Human Rights NGOs Evicted in Mogilyov On April 2, independent media reported that the Belarusian Helsinki Committee and the Human Rights Center in the eastern city of Mogilyov are being forced out of their offices. The state housing authorities are pressuring the NGOs to voluntarily terminate the lease agreement; otherwise, they will face an eviction lawsuit. The landlord accused the NGOs of subleasing the office to a humanitarian organization without its consent. The human rights NGOs deny that they breached the lease agreement, and that authorities are only attempting to hinder NGOs' activities. -------------- International Trade and Investment -------------- ¶9. Russia Concerned over Beltransgaz Price Reductions Russian Ambassador to Belarus Alexander Surikov told the reporters on March 30 that Russia's Gazprom is concerned over Beltransgaz plan to remove USD 18 markup on the price charged to Beltopgaz, which distributes natural gas to local consumers. Under the December 31, 2006 agreement, Gazprom will acquire 50 percent of Beltransgaz stock in four equal annual installments by 2010. Gazprom claims the plan may impede the establishment of a joint venture (JV),since the new reduced price charged to Beltopgaz will reduce Beltransaz profits. Ambassador Surikov referred to the provision in the JV agreement that allows Gazprom to double the price it charges Beltransgaz for the natural gas supplied to Belarus. Gazprom may threaten to resort to it, since price reduction was off the agenda when Beltransgaz was assessed for the JV deal. ¶10. Italian Banks To Finance Belarusian Oil Projects On April 3, UniCredito Italiano Vice President Fabrizio Palenzona met with Belarusian Prime Minister Sergey Sidorskiy to discuss possible financing of Belarusian oil industry projects by Italian banks. According to Palenzona, his bank had negotiated about USD 70 million in investment, and a branch of Russia's Moscow International Bank would be opened in Belarus within two weeks. UniCredito Italiano is the sole owner of the Russian bank. -------------- Domestic Economy -------------- ¶11. PM Says Belarusian Economy Immune to Outside Shocks On March 30, Belarus' Prime Minister Sidorsky told the Advisory Council for Foreign Investment that Belarus' economy has been immune to the adverse consequences of Belarus' recent conflict with Russia over energy prices. Belarus' GDP growth in January-February reached nine percent. He nevertheless admitted that higher energy prices had caused "some problems." ¶12. GOB Predicts Job Holders up 10-11 Percent by 2010 On April 4, Belarus' the head of the employment and population department with the Labor Ministry, Nikolai Kokhonov, announced job centers are expected to increase the number of job holders by 11 percent during 2005-2010 to 4.8 million people. According to Kokhonov, this increase will exceed both the number of Belarusians who work abroad and those who are trying to find jobs without using official employment services, figures estimated at 180,000 people and 192,000 people, respectively. Belarus' Labor Ministry reports that some 105,000 Belarusians are out of work because of poor health, 144,000 are not actively seeking employment, and 110,000 do not need to work because of savings or investments. The Ministry MINSK 00000290 003 OF 003 classified 744,000 unemployed people as part of the economically active population. -------------- Society -------------- ¶13. GOB Considers Construction of Antarctic Station On April 3, two Belarusian explorers returned to Minsk after spending five months in Antarctica as part of a Russian expedition. Their research will help the GOB decide whether to build its own manned research station in Antarctica or use an abandoned Russian facility. Constructing a new station is expected to cost the GOB between USD 8 and 10 million. Russian icebreakers will be required to supply whichever facility the GOB chooses. -------------- Quote of the Week -------------- ¶14. During an interview on April 4, President Lukashenko offered the following explanation why the issue of Belarusian political prisoners is actually an EU artifice: "[The Europeans] are like die-hard sheep bearing against this gate, and demand us to release political prisoners. We do not have political prisoners, and we have shown them why those people had been convicted. These people were spurred on to the barricades by the EU and its money, and the West wants to release them. Well, come and admit that you [EU countries] are guilty, offer an apology to the Belarusians, and say, 'let's deal with the matter'." Stewart