EMBASSY MINSK WEEKLY POL/ECON REPORT - MAY 3, 2007

UNCLAS SECTION 01 OF 03 MINSK 000358 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PGOV PREL PHUM ECON EPET ENRG BO SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - MAY 3, 2007 ¶1. The following are brief items of interest compiled by Embassy Minsk. TABLE OF CONTENTS Civil Society -------------- - Former Political Prisoner Banned From Traveling Abroad (para. 2) - Over 4,500 Signatures Collected to Challenge the Religion Law (para. 3) - GOB to Review Former Monastery Reconstruction (para. 4) - Chernobyl Liquidators Not Allowed to Debate Benefits Bill (para. 5) - Harassment Against Opposition Leader's Wife Continues (para. 6) Domestic Economy -------------- - Less Russian Crude Oil Supplied to Belarus in 2007 (para. 7) - Russia-Poland Meat Stand-off Affects Belarus (para. 8) - Slump in Sugar Exports to Russia Part of a Broader Deal (para. 9) - Imports of Inexpensive Moldovan Wines Reduced (para. 10) International Trade and Investment -------------- - Expensive Internet Slows Down E-trade in Belarus (para. 11) - Belshina to Stop Internet Sales (para. 12) - QUOTE OF THE WEEK (para. 13) CIVIL SOCIETY -------------- ¶2. Former Political Prisoner Banned From Traveling Abroad On April 29, opposition activist, former MP and political prisoner Sergey Skrebets informed independent mass media that he was banned from traveling abroad. Minsk District Passport and Visa Services notified Skrebets that he cannot leave Belarus until he paid all the damages he owes to the GOB. [Note: In 2006, the GOB found Skrebets guilty of embezzlement and bank loans fraud and mandated him to repay USD 700,000 (BYR 1.5 billion). End note.] Skrebets claims his property was confiscated, and though he never pleaded guilty, he is consistently paying off the damages. Skrebets is appealing the decision to overturn the travel ban. ¶3. Over 4,500 Signatures Collected to Challenge the Religion Law As of May 2, the Protestant New Life Church (NLC) web site announced that over 4,500 people across Belarus signed a petition to challenge the 2002 law on religious freedom and religious organizations. The organizers aim to collect at least 50,000 signatures to protest the law during the signature collection campaign, which started on April ¶22. Christian communities maintain that the law heavily restricts their activities, suppresses freedom of religion, and legalizes GOB's administrative and criminal prosecution of individuals for �0A;their religious beliefs. NLC lawyer Sergey Lukanin considered the ongoing campaign a success, citing reactions from GOB ideology officers and the regional authorities' invitation to discuss the campaign with a Protestant pastor. ¶4. GOB to Review Former Monastery Reconstruction On May 2, BelaPAN independent news agency reported that following a petition from the St. Joseph Roman Catholic community, the Presidential Administration established an interagency commission to study plans for the reconstruction of the former Bernardine monastery building in central Minsk. Prominent historians and members of the Catholic community urged the government to abandon plans to convert the monastery into a five-star hotel and an entertainment center and to return it to the community instead. The interagency commission will be in charge of monitoring site research and archeological works and also reviewing any incoming projects for reconstruction. ¶5. Chernobyl Liquidators Not Allowed to Debate Benefits Bill Despite an invitation from Presidential Administration Deputy Head Natalya Petkevich, Chernobyl Blast Aftermath Liquidators Leader Aleksandr Volchanin was not allowed to attend the May 3 parliamentary hearings on the bill for abolishing liquidators' benefits. Petkevich's invitation followed a petition, signed by 360 liquidators, protesting cancellation of free medical treatment, extra paid leave, and early retirement at age 55. Chernobyl Blast Aftermath Liquidators plan to hold a founding conference on May 19 to establish an association and unite 126,200 military and civilian workers affected by the blast. ¶6. Harassment Against Opposition Leader's Wife Continues MINSK 00000358 002 OF 003 On April 29, BelaPAN independent news agency reported that de facto opposition leader Aleksandr Milinkevich's wife Inna Kulei filed a criminal lawsuit with the prosecutor's office after her personal information was posted on a web site advertising sexual services. Kulei says she has been receiving a number of sexually explicit phone calls and believes her cell phone number was purposefully disclosed to insult and discredit her. In March, Milinkevich's car was splashed with acid and Kulei's car was vandalized with graffiti and two flat tires. Kulei attributed the elevated harassment to her successful activities as the coordinator of educational programs assisting expelled youth in finding study abroad opportunities. INTERNATIONAL TRADE AND INVESTMENT -------------- ¶7. Less Russian Crude Oil Supplied to Belarus in 2007 According to the Ministry of Statistics, Russian oil companies supplied 4.1 million tons of crude oil in January-March to Belarus' two oil refineries, which represents a 25-27 percent decrease on the year. The delivery target for 2007 nevertheless remains unchanged at 21.5 million tons. ¶8. Russia-Poland Meat Stand-off Affects Belarus On April 27, Prime Minister Sergey Sidorskiy called Russia's recent restrictions on imports of Belarusian meat, dairy, and fish products absurd and unacceptable as they seriously damage the Belarusian food industry. In early 2006, Russia's food safety watchdog, Rosselkhoznadzor, inspected 23 Belarusian meat factories and banned 20 from exporting to Russia on minor technical grounds. The true "fault" of these factories was the purchase of Polish meat for their production purposes. In the fall of 2005, Russia banned imports and re-imports of Polish meat for quality reasons. ¶9. Slump in Sugar Exports to Russia Part of a Broader Deal Belarus' on-the-year sugar exports to Russia fell 86.6 percent from January to March. Belarus and Russia signed a sugar agreement in late March to reduce Belarus' sugar exports from 180 thousand tons in 2007 to 100 thousand tons in 2008. The agreement became a part of a broader deal between the two countries to remove certain restrictions in mutual trade for 2007. For example, the Russia-Belarus 2007 trade agreement signed in late March helped increase Russian beer on-the-year imports in January-February by 62 percent. ¶10. Imports of Inexpensive Moldovan Wines Reduced Belarus' imports of inexpensive wines from Moldova -- which represents 90 percent of the Belarusian market -- decreased on the year in January-March by 58 percent. The slump was caused by the Moldovan government's requirement to export wine materials to Belarus and Ukraine only via a newly established joint venture. In the meantime, wine imports from Bulgaria rose by 30 percent, from Italy by 34 percent, and from France by 3 percent. Nevertheless, the additional imports from these three countries did not fully compensate for the decrease in Moldovan wine imports. DOMESTIC ECONOMY -------------- ¶11. Expensive Internet Slows Down E-trade in Belarus At the "IT in Trade and Services Sector" conference on April 27, independent expert Sergey Povalishev named expensive Internet access as the major problem for Belarus' nascent e-business. Internet prices in Minsk are higher than in Moscow but comparable with those in other places in Russia. Povalishev also cited excessive licensing and expensive registration of domain names as other impediments to e-trade in Belarus. In addition, internet advertising on Belarusian websites is virtually non-existent, comprising only USD 1.5 million of Belarus' overall USD 60 million advertising market. ¶12. Belshina to Stop Internet Sales Belarusian tire manufacturer Belshina told Prime-Tass news service on April 27 that it was allowed to stop selling its products electronically and set its product prices independently. The decision was made by the governmental oil and chemical industry agency Belneftekhim, which revoked its own decision that obliged all subordinate manufacturers, including Belshina, to sell products over the internet. Although e-sales helped Belshina increase its exports in 2006 by 140 percent, unstable prices scared off many of its traditional consumers, including U.S. tractor company Caterpillar. Belshina hopes to use this new sales strategy to build long-term relations with its consumers and improve maintenance and technical support. MINSK 00000358 003 OF 003 ¶13. QUOTE OF THE WEEK On April 27, President Lukashenko outlined the GOB's strategy for selling government property: "All want to get our property for a song. Pay us big money and we will sell you what works poorly, but we will not sell what works well." STEWART