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

UNCLAS SECTION 01 OF 02 MINSK 000678

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - AUGUST 3, 2007



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

TABLE OF CONTENTS

Civil Society
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- Neo-Nazi Activist Jailed (para. 2)
- Disabled Children Seek Greater State Support (para. 3)
- Two Protestants Briefly Detained (para. 4)
- Human Rights NGO Seeking Re-Registration (para. 5)
- Law Officers Complete Anti-TIP Training (para. 6)

Domestic Economy
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- GOB Reports That Investment Reached USD 1 Billion (para. 7)
- Belarus' Trade Deficit Rises (para. 8)
- Potash Sales In 2007 at Record High (para. 9)

International Trade
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- Lukashenko Allows Foreign Purchase of Motovela (para. 10)
- Venezuela's USD 500 Million Loan to Belarus Project (para. 11)

- Quote of the Week (para. 12)

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Civil Society
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2. Neo-Nazi Activist Jailed

A Gomel court on July 27 sentenced Mikhail Yakovchuk, an activist of
the Russian-based neo-Nazi group Russian National Unity (RNE) to six
months in jail for participating in an unregistered organization.
Yakovchuk defied earlier warnings from the prosecutor's office and
continued to distribute printed materials and recruit new members.
The Belarusian Helsinki Committee voiced concern over the mild
sentence, citing that the Criminal Code provides harsher punishment
for inciting ethnic and religious hatred. Yakovchuk is the first
non-opposition member penalized under the controversial Article 193,
which many human rights NGOs view as unconstitutional.


3. Disabled Children Seek Greater State Support

On July 27, the Association of Disabled Children with Cerebral
Paralysis and Spinal Pathology in Gomel appealed to authorities to
increase state support to families with disabled children. The
120-member association sent copies of the appeal to the Presidential
Administration, Parliament, and the Ministry of Labor and Social
Security. Head of the association Elena Maksimova pointed out that
the monthly allowance to parents with a disabled child over 18 years
of age was only USD 20 and for underage children USD 65. Moreover,
parents with disabled children are not able to earn a decent living
as they must constantly take care of the children and purchase
expensive medicines. Maksimova cited the "miserable" conditions for
such families and doubted that authorities would take measures to
alleviate their situation.


4. Two Protestants Briefly Detained

Dmitriy Butenko and Andrey Litvinov, members of the Minsk-based
Protestant New Life Church (NLC) community, were detained on July

27. Police apprehended the two activists in downtown Minsk as they
were planning to collect signatures for a petition calling for the
liberalization of Belarus' discriminatory religion law. They were
taken to a nearby police station, charged with distributing illegal
printed materials, and released two hours later. NLC lawyer Sergey
Lukanin maintained that the detention was illegal because Butenko
and Litvinov had not distributed any leaflets. He also vowed that
NLC activists would continue collecting signatures despite GOB
harassment.


5. Human Rights NGO Seeking Registration

Staff of human rights NGO Vyasna on July 31 reported that they
applied for re-registration with the Ministry of Justice (MOJ) on
July 23. This is Vyasna's first attempt after losing registration
in October 2003. Human rights lawyer Vladimir Labkovich reiterated
that the chances of obtaining registration was "zero" since the GOB
repeatedly fails to observe and protect citizens' rights. According
to Labkovich, an MOJ official unofficially told him that registering
Vyasna was a "political decision" that had already been made.


6. Law Officers Complete Anti-TIP Training

Twenty-six police officers from Belarus, Armenia, Georgia, Moldova,

MINSK 00000678 002 OF 002


Ukraine and other countries completed educational courses at the
international center for anti-TIP and illegal migration training at
the Ministry of the Interior (MVD) Academy July 31. The officers
studied various issues related to TIP and migration, ranging from
international and Belarusian legislation on human trafficking to
interacting with TIP victims. MVD Academy professors and Belarusian
scholars developed the courses and invited experts from the
International Organization for Migration to speak. The Academy will
soon enroll more law enforcement agents to study social and
psychological rehabilitation for TIP victims, trends in migration,
and legal instruments for its regulation.

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Domestic Economy
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7. GOB Reports That Investment Reached USD 1 Billion

Prime Minister Sergey Sidorskiy told the Cabinet on July 31 that
economic investment in Belarus increased 20 percent in January-June
to USD 1 billion. In that time, the money market and inflation
remained stable. The economy's biggest concern was the growing
foreign trade deficit caused by higher energy prices and intensive
import.


8. Belarus' Trade Deficit Rises

The statistics ministry on July 31 announced that Belarus' foreign
commodity trade deficit doubled in January-June on the year to USD
1.8 billion. The ministry attributed the deficit to a 22.4 percent
increase in imports and only a 15.3 percent rise in exports.
Belarus' trade deficit with CIS countries reached USD 3.2 billion
(primarily with Russia). Belarus had a USD 1.4 billion surplus in
trade with non-CIS countries.


9. Potash Sales In 2007 at Record High

Deputy Prime Minister Vladimir Semashko announced July 31 that
Belarusian Potassium Company would increase its on-the-year sales in
2007 by 20 percent to USD 1.2 billion. The company, jointly
controlled by Belaruskaliy and Russia's Uralkaliy, was established
in 2005 to sell Belarusian and Russian-made potassium fertilizers in
the world markets without intermediaries. According to Semashko,
the Belarusian Potassium Company now sells fertilizers at a
record-high USD 300 per ton, while only two years ago the price
ranged from USD 110-120 per ton.

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International Trade
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10. Lukashenko Allows Foreign Purchase of Motovelo

On July 31, Lukashenko allowed Austria's ATEC Holding GMBH to
purchase the GOB's 99 percent stake at the Minsk bicycle/motorcycle
manufacturer Motovelo. Under the agreements, ATEC will settle the
company's debts and invest at least USD 20 million to continue the
production of bikes while using the same brand name. In previous
speeches Lukashenko often praised ATEC for investing in Belarus
without competing with traditional domestic industries.


11. Venezuela's USD 500 Million Loan to Belarus Project

Deputy Prime Minister Semashko informed the GOB on July 31 that
Venezuela issued a USD 500 million loan to fund joint venture
projects with Belarus in 2007. According to Semashko, Venezuelan
President Hugo Chavez promised that should the projects develop as
planned, his governnment would issue 15 yearly USD 500 million loan
installments to Belarus at 3.5 percent interest. Semashko mentioned
that important joint projects with Venezuela included oil
exploration and extraction, housing construction, and food supplies.


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12. Quote of the Week
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According to independent news portals, on July 25 lead singer of the
Rolling Stones Mick Jagger -- whose group performed in Warsaw --
told representatives of the Belarusian Free Theater that he was
interested in the situation in Belarus and hoped it would one day be
a free European country. In the best Belarusian he could muster,
Jagger allegedly proclaimed the opposition slogan "long live
Belarus!"

Stewart