EMBASSY MINSK WEEKLY POL/ECON REPORT - June 29, 2007

UNCLAS SECTION 01 OF 04 MINSK 000561

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON EPET ENRG BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - June 29, 2007


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

TABLE OF CONTENTS

International Relations
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- GOB and Russian FMs Discuss Union, Missile Shield (para. 2)
- Official Israeli Delegation Arrives in Minsk (para. 3)
- Vietnam Military Delegation Visits Minsk (para. 4)
- Judges Reject GOB Fines of American Volunteers (para. 45)

Civil Society
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- Protestant Pastors Lose Appeals (para. 6)
- Leftist Union to Hold Second Founding Convention (para. 7)
- Opposition Groups Request Permission to Rally (para. 8)
- Independent Trade Union Suffers Burglaries, Beating (para. 9)
- GOB Establishes NGO 'Belaya Rus' (para. 10)

Society
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- Blood Donors Protest Cuts of Social Benefits (para. 11)
- Holocaust Conference for Children Held in Brest (para. 12)

Domestic Economy
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- Finance Ministry Announces USD 7.5 million Surplus (para. 13)
- First Quarter Aggregate Income at USD 3.6 Billion (para. 14)

International Trade
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- GOB Expects 1.9 billion in Foreign Investment (para. 15)

Quote of the Week (para. 16)

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International Relations
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2. GOB and Russian FMs Discuss Union, Missile Shield

On June 28, Belarusian Foreign Minister Sergey Martynov and Russian
Foreign Minister Sergey Lavrov held talks in Minsk on further
integration of Russia and Belarus in the Union State and the
Commonwealth of Independent States. The Russian minister expressed
gratitude to Minsk for supporting Moscow's stance on the
Conventional Armed Forces in Europe Treaty and the OSCE's reform and
the GOB's cooperation within the Collective Security Treaty
Organization and the Eurasian Economic Community. According to
Martynov, the ministers agreed to develop bilateral ties according
to "two-year programs," the first of which would be prepared in the
fall. Turning to U.S.-Russian relations, Lavrov claimed that the
U.S. has "no objective need" for deploying missile defense systems
in Eastern Europe and expressed hope that the United States would
drop such plans. Lavrov noted that Russia and the GOB shared views
on "issues that directly concern strategic stability."


3. Official Israeli Delegation Arrives in Minsk

On June 24, an Israeli Knesset delegation arrived in Belarus at the
invitation of a group of Belarusian legislators who support
increased cooperation between their two countries. They discussed
cooperation on issues of social support, including the payment of
pensions to Israeli residents who have emigrated from Belarus. The
Israeli delegation also met with members of the Jewish community and
visited historical locations in Belarus.


4. Vietnam Military Delegation Visits Minsk

On June 21, a delegation of senior military officials from Vietnam
arrived in Belarus for a two-day visit during which they met with
counterparts in the Belarusian Defense Ministry. Both sides
stressed the historical military connections between their two
countries and emphasized future cooperation in military development
and training. The Vietnamese delegation, led by Chief of the
General Staff and Deputy Defense Minister Nguyen Khac Nghien, also
visited the Belarusian Military Academy, several army units,
military research centers, and the "Stalin Line" WWII memorial.


5. Judges Reject Government Fines of American Volunteers

On July 21, a Minsk court overturned the fines levied on seven
American citizens in Belarus by regional authorities and ordered
retrials. The authorities fined and deported the Americans, who

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were in Belarus as volunteer English teachers at the invitation of a
Protestant church, for alleged illegal religious activities in
February. The judges attributed their decision partly to technical
errors with the preparation of the police reports.

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Civil Society
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6. Protestant Pastors Lose Appeals

On June 27, Christian groups reported that the judges dismissed
Protestant Pastor Antoniy Bokun's two appeals and Polish Protestant
Pastor Yaroslav Lukasik's deportation appeal. According to Bokun,
it took the judge five minutes to hear the case of Bokun's complaint
about police abuse during his arrest on June 3. With no follow-up
questions, the judge upheld lower court's verdict not to overturn
Bokun's three-day arrest and charges of leading unsanctioned
religious services at his home. On June 26, authorities denied
Lukasik's appeal over his deportation from Belarus for the alleged
threat presented to the national security of the country. The judge
reportedly did not allow Lukasik's lawyer to represent him at court,
and only police officers testified.


7. Leftist Union to Hold Second Founding Convention

On June 25, independent media reported that three opposition
left-wing parties plan to hold a second founding convention to
establish an alliance and obtain official registration. The
Belarusian Party of Communists, Women's Party 'Nadzeya,' and the
Belarusian Social-Democratic Party Gramada founded the Union of Left
Parties (ULP) at a conference in Chernigov, Ukraine, on December 17,
2006 after the GOB did not allow them to meet in Belarus. The
Belarusian Ministry of Justice (MOJ) rejected ULP's registration
application and issued warnings for holding the conference abroad.
The parties now want to comply with MOJ requirements by holding a
second founding convention in Belarus. As of June 29, the parties
had not determined the date of the conference.


8. Opposition Requests Permission for Kozulin Rally

On June 23, members of the Belarusian Social Democratic Party (BSDP)
applied to the local governments of Brest and Vitebsk for permission
to hold a rally on July 10 to protest the imprisonment of their
chairman Aleksandr Kozulin. Kozulin was arrested in March 2006
while leading a march protesting the presidential election and was
sentenced to 5.5 years in prison for charges of hooliganism and
disturbing the peace, which the BSDP have said were politically
motivated. BSDP hopes the rally will raise awareness among
Belarusians about the international community's support for
Kozulin's release. Vitebsk authorities rejected a previous BSDP
application to rally, claiming that the location requested for the
rally was reserved for another event. Authorities blocked a similar
attempt by the BSDP in the eastern city of Mogilev to hold a picket
for Kozulin's release.


9. Independent Trade Union Suffers Burglaries, Beating

On June 22, unknown burglars broke into the offices of the Belarus
Radio and Electronics Workers Union (REWU) and stole property in the
third such theft this year. The union's chair stated that the
police have suspended their investigation of these cases due to a
lack of suspects. He asserted that this suspension is a result of
government complicity in the crimes as part of a crackdown on his
independent trade union. The day before the office break-in,
Alexander Beresnev, an active member of the REWU, was severely
beaten and robbed in his workplace only days after writing a letter
to the Presidential Administration to complain about the abuse of
workers rights in his industry. He reported that during the beating
he and his family were threatened with death if he did not cease
writing letters.


10. GOB Establishes NGO 'Belaya Rus'

On June 22, Minsk authorities held a conference to establish the
city chapter of the national NGO "Belaya Rus," following a number of
founding conventions in the regions. Conference participants
declared that their aim is to create the largest NGO in Belarus in
order to link the government with the people who work to implement
current policies. The NGO's official goals are to contribute to the
building of a strong and prosperous Belarus, to ensure political and
social stability, "to promote spiritual and moral development" based
on the Belarusian ideology. State TV ideology officials, MPs, and
university rectors joined the NGO's presiding board. Independent
journalists were not allowed to observe the conference. Authorities
convened a similar conference in the western city of Brest on June

27.

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Society

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11. Blood Donors Protest Cuts of Social Benefits

On June 20, more than 1,500 blood donors in the eastern city of
Mogilyov began a boycott of the city's blood transfusion centers to
protest cuts of social benefits. The donors in Minsk and Brest also
support the protest. Mogilyov donors threaten with an indefinite
strike if the officials do not get in touch with them by July 1. A
newly-adopted law ended blood donors' 50 percent discount for
prosthetic dentistry and medicine purchases and cut their 40 percent
pension raise. The protesters in Mogilyov dispersed flyers to
inform the public about the cuts and also have plans to establish an
organization to protect their rights and grant assistance to the
donors nationwide.


12. Holocaust Conference for Children Held in Brest

On June 24, an annual four-day Holocaust conference for
schoolchildren concluded in the southwestern city of Brest. The
conference, called "Holocaust: Memory and Prevention," brought
together 25 winners of regional conferences in Belarus, Russia, and
Ukraine as well as educators and Holocaust studies centers' leaders.
Schoolchildren spoke on various topics, including lessons of the
Holocaust and the Holocaust's place in history. Speakers presented
reports about Jewish history of their resident area based on
victims' Holocaust accounts. Participants also watched a
documentary about the Brest Jewish ghetto, visited the Brest
Fortress Memorial to commemorate the WWII victims and Holocaust
massacre sites, and met with a Brest ghetto survivor.

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Domestic Economy
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13. Finance Ministry Announces USD 7.5 million Surplus

On June 22, the Belarusian Finance Ministry announced a budget
surplus of USD 7.5 million in the first quarter of 2007, which
represented 4.7 percent of the country's GDP during that period.
Budget revenues were reported at USD 6.3 billion -- 43.6 percent of
the 2007 revenue target. The annual budget for 2007 predicts
revenues of USD 14.5 billion, expenditures of USD 15 billion, and a
budget deficit 1.5 percent of the annual GDP.


14. Aggregate Income at USD 3.6 Billion

On June 22, Belarus' Statistics Ministry announced that Belarusian
aggregate monetary income hit USD 3.6 billion between January and
May 2007, up 17 percent from the 2006 total income figure. The
portion of total income that came from salaries and wages as well as
from social transfers declined 3 percent to 57.4 percent and .8
percent to 21.2 percent, respectively. The portion coming from
entrepreneurial activity rose 3.6 percent to 19.6 percent, while the
portion from property income remained constant at 1.8 percent of the
total income. Of the total income, 78.6 percent was spent on goods
and services, 15 percent was paid in taxes and given to charity, and
6.4 percent was invested in savings and foreign currencies. The
average wage for April 2007 totaled 293 dollars, up 10.3 percent
from April 2006, while the average pension amounted to 130 dollars,
an increase of 13.2 percent.

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International Trade and Investment
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15. GOB Expects 1.9 billion in Foreign Investment

Citing an advance copy of Belarus' Economic Ministry's macroeconomic
forecast, independent media reported that the GOB plans to attract
at least USD 1.9 billion in foreign investment in 2008 -- the same
level as in 2007 -- with foreign direct investment projected at USD
1 billion. The GOB ostensibly plans to facilitate foreign
investment by improving the business climate, obtaining a sovereign
credit rating, and increasing foreign investment in privatizing
state enterprises. Moreover, the Economy Ministry plans to
disburse loans provided by Austria, China, Italy and Arab countries
and to continue selling its stakes in commercial banks in order to
expand their resource base and provide more lending opportunities.
In January-March 2007, foreign investment in Belarus rose 180
percent on the year to USD 1.2 billion. Foreign Direct Investment
rose 60 percent over the first quarter of 2006 to USD 257 million.

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Quote of the Week
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16. On June 26, Marina Solodkina, Chair of the Knesset's
Israel-Belarus Inter-parliamentary Friendship League, lamented
Israel's "insufficient ties" with Minsk and offered the following

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praise for Belarus' environmental potential:

"Your country has a great future. Belarus is a promising state that
is yet to prove its worth. In the condition of global warming,
Belarus has a more advantageous geographic location than other
states."

Stewart