EMBASSY MINSK WEEKLY POL/ECON REPORT - June 1, 2007

UNCLAS SECTION 01 OF 02 MINSK 000464

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON EPET ENRG BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - June 1, 2007


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

TABLE OF CONTENTS

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

- Activists Protest Abolition of Social Benefits (para. 2)
- Protestant Pastors Face Intensified Harassment (para. 3)
- Youth Activists Protest Old Town Demolition in Grodno (para. 4)
- Opposition Leader's Car Damaged Once Again (para. 5)
- Belarusian Orthodox Church to Support Commemoration of Stalinist
Crimes Victims (para. 6)

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

- Oil Refineries Incur Losses After Making Forced GOB Payments
(para. 7)
- Free Economic Zones' Production Up 17.6 Percent (para. 8)
- On-the-year Cash Income Up 17 Percent (para. 9)

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

- Six CIS Member States Agree on Common Electric Power Market (para.
10)

- Quote of the Week (para. 11)


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


2. Activists Protest Abolition of Social Benefits

On May 30, BelaPAN independent news agency reported on a number of
planned and banned demonstrations to protest the parliament's
adoption of legislation to remove and/or cut social benefits.
Independent trade union and opposition activists in Mogilyov
received a permission to hold a one-hour demonstration on June 1.
The pro-opposition Belarusian Party of Communists (BPC) local branch
in Brest was also granted permission to hold a rally on June 1 and
will continue to collect signatures to challenge social benefits
cuts. On May 29, however, Gomel authorities denied the local BPC
branch permission to stage a June 1 protest in the city. Meanwhile,
the pro-government Federation of Trade Unions (FTU) called for
restoration of some retirement benefits. The FTU also submitted a
proposal to parliament seeking extra leave to long-time serving
employees and those who work overtime.


3. Protestant Pastors Face Intensified Harassment

On May 28, the court found St. John the Divine Church pastor Antoniy
Bokun guilty of conducting an illegal religious service and fined
him 620,000 rubles (USD 290). Police officers arrested Bokun and
Polish Protestant pastor Yaroslav Lukasik on May 27 after entering
Bokun's house and videotaping the religious service. On May 30,
authorities fined Polish citizen Lukasik 31,000 rubles (USD 15) for
unauthorized religious activities, issued him deportation orders
effective June 7, and barred him from returning to Belarus for five
years. On May 8, 2007, authorities canceled Lukasik's residency
permit due to his alleged involvement in "activities aimed at
causing damage to the national security of Belarus." Lukasik, a
resident of Belarus since 1999, linked his deportation with
continued GOB harassment of religious activists and his public
criticism of Belarus' religious laws.


4. Youth Activists Protest Old Town Demolition in Grodno

On May 29, youth activists staged a 15-minute protest against the
local authorities' demolition of historical buildings in old town in
the western city of Grodno. The protestors had to change the venue
since the police blocked off the original point of assembly. Youth
activists displayed a sign that read "Stop the Vandals" on a
building and distributed leaflets with information about local
authorities' demolition project in the city center in order to widen
the road and the bridge. This demonstration was part of activists'
"Save Grodno" campaign, which protests the authorities' demolition
plans.


5. Opposition Leader's Car Damaged Once Again

On the night of May 30, vandals splashed acid on "For Freedom"
Movement leader Aleksandr Milinkevich's car. Milinkevich filed a
complaint with law-enforcement agencies to investigate the incident.
This is the fourth case of Milinkevich's car being damaged in the
last six months. Milinkevich believes that such incidents are
related to his political activities, and that vandals are attempting
"to bowl him down".

MINSK 00000464 002 OF 002




6. Belarusian Orthodox Church to Support Commemoration of Stalinist
Crimes Victims

On May 28, independent media reported that Head of the Belarusian
Orthodox Church (BOC) Metropolitan Philaret expressed support of the
public organizing committee for commemoration of the victims of
Stalinist repressions. Metropolitan Philaret lauded committee's
efforts to organize commemorative events in 2007 to mark the 70th
anniversary of the Stalinist purges, and provided it with a detailed
agenda of the BOC's plans to honor the victims, including
assassinated Orthodox priests. Historian and committee co-founder
Igor Kuznetsov expressed hope for future effective cooperation with
the BOC.

DOMESTIC ECONOMY
--------------


7. Oil Refineries Incur Losses After Making Forced GOB Payments

The Mozyr Oil Refinery, one of Belarus' two oil refineries, told
Prime-Tass news services on May 28 that it incurred USD 5 million
losses in April primarily due to USD 3 million worth of mandatory
payments it was forced to make to the Government's Innovation Fund.
From January through March, the Mozyr refinery's monthly profit was
USD 2.5 million; however, on May 23, the government increased the
rate of mandatory payments eight times. The Novopolotsk Oil
Refinery had to pay USD 4 million in mandatory payments in April but
still managed to make a USD 0.5 million profit mainly because its
export expenses are lower than the Mozyr Oil Refinery's expenses.


8. Free Economic Zones' Production Up 17.6 Percent

According to the Ministry of Statistics, Belarus' six regional free
economic zones (FEZ) increased their on-the-year production in
January through March by 17.6 percent. Total exports of the FEZ's
resident businesses totaled USD 206.3 million -- up 41 percent on
the year -- while their imports were up 81.2 percent to USD 189.2
million. Most exports went to Russia, while most imports came from
outside CIS. Of the 266 resident businesses in the country's FEZ,
however, 33.5 percent reported losses.


9. On-the-year Cash Income Up 17 Percent

According to the Ministry of Statistics, Belarusians' on-the-year
total cash income was up 17 percent in first quarter of 2007.
Salaries accounted for 58 percent of the income versus 61.4 percent
a year ago. Belarusians spent 78.3 percent of their income on goods
and services and invested only 6.3 percent into savings and foreign
currency. In March, the average salary and pension equaled USD 307
and USD 130 respectively.

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


10. Six CIS Member States Agree on Common Electric Power Market

On May 25, the prime ministers of Russia, Kazakhstan, Belarus,
Kyrgyzstan, Tajikistan, and Armenia signed an agreement on a common
electric power market. According to Russia's Premier Mikhail
Fradkov, the agreement will facilitate trade in and provide equal
access to energy resources. Under the agreement, the six countries
will separate power transfer and management services from generation
and trading in electric power. The parties will provide power
transit services irrespective of the origin, owner and destination
of power and will establish unified customs rules and procedures.

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


11. The Belarusian Embassy in Lithuania denied Lithuanian MP and
Parliamentary Assembly Council of Europe Representative Emanuelis
Zingeris a visa to travel to Belarus for the opposition's May 26-27
United Democratic Forces' Congress. Zingeris linked his denial to
the harsh statement he made to the Belarusian regime at the 2005
Congress. While commenting on his visa denial, Zingeris stated:

"I would be glad if my wife would take me so seriously and respect
me the way Lukashenko does."

STEWART