EMBASSY MINSK WEEKLY POL/ECON REPORT - August 24, 2007

UNCLAS SECTION 01 OF 02 MINSK 000728

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON ENRG BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - August 24, 2007


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

TABLE OF CONTENTS

Civil Society
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- Neo-Nazis Threaten Vitebsk Activist (para. 2)
- Police Prevent Solidarity Demonstration (para. 3)
- Vendors Hold Spontaneous Protest at Minsk Market (para. 4)
- Opposition and NGOs Hold Forum on Benefit Cuts (para. 5)
- Police Disrupt Camping Trip, Detain Youths (para. 6)

Domestic Economy
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- Cyprus Company Buys Full Control of GSM Provider (para. 7)
- Fewer Companies in the Red (para. 8)
- Minister: Belarus Cannot Do Without Nuclear Energy (para. 9)
- S&P Rates Belarus B+ Long-Term, B Short-Term (para. 10)

International Trade
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- Belarus Eyeing Increased Ties With Vietnam (para. 11)

- Quote of the Week (para. 12)

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Civil Society
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2. Neo-Nazis Threaten Vitebsk Activist

On August 17, four opposition activists in Vitebsk received
threatening letters signed by members of the neo-Nazi Russian
National Unity organization. The letters are a response to the red
and white opposition flags that are placed monthly throughout
Vitebsk, and threaten Miron, the anonymous figure who takes
responsibility for the flags, with "punishment" if he flies the
white-red-white nationalist symbol again.


3. Police Prevent Solidarity Demonstration

On August 16, police in riot gear dispersed a demonstration in Minsk
held in solidarity with Belarusian political prisoners. When
participants approached Freedom square to demonstrate with candles
and pictures of the prisoners, they were surrounded by police and
forced onto a trolley, which took them to a market in another area
of the city. A similar demonstration was held unhindered elsewhere
in Minsk, though opposition leaders were followed closely by
plainclothes policemen and youth activist Nikita Sasim was arrested
later that night. Friends with Sasim at the time tried to resist
the police, but were beaten. One, Tatyana Tishkevich, was kicked in
the head and suffered swollen kidneys, which kept her hospitalized
for over a week. The day after Sasim's arrest, a Minsk Court
convicted him of petty hooliganism for allegedly using obscene
language and sentenced him to ten days in prison. The
demonstrations were part of a "Day of Solidarity" remembrance, held
on the sixteenth of every month since September 2005 in memory of
two opposition figures who went missing on the sixteenth of
September 1999.


4. Vendors Hold Spontaneous Protest at Minsk Market

On August 19, over one hundred vendors at the Zhdanovichi shopping
complex held a protest against government tax agents. The agents
were threatening to confiscate the entire stock of a coat-seller's
stall after a salesperson there failed to produce paperwork in
compliance with new regulations. Police broke up the demonstration
shortly afterwards and the tax agents left to obtain a confiscation
warrant from a court. The spokesperson for a local small business
association later released an open letter to the tax ministry
criticizing the new regulations and described the protest as a
"nervous breakdown" following recent government pressure on small
businesses.


5. Opposition and NGOs Hold Forum on Benefit Cuts

On August 19, about 40 representatives of opposition parties and
NGOs held a forum in Minsk to discuss the extensive social benefits
cut that the GOB has scheduled for December. The meeting resulted
in plans to hold two street protests against the cut and a
resolution criticizing the cut and the legislators who approved it.



6. Police Disrupt Camping Trip, Detain Youths

On August 18, police apprehended seventeen youth members of the

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Belarusian Popular Front while they were on a camping trip in the
Brest region. The officers then brought them to a local police
station to await charges of petty hooliganism for allegedly using
obscene language. Later, however, the police escorted the
opposition members onto a Minsk-bound train and released them
without charges.

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Domestic Economy
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7. Cyprus Company Buys Full Control of GSM Provider

Interfax news service reported on August 22 that SB-Telecom of
Cyprus to take over Velcom, Belarus' second largest GSM phone
services provider. SB-Telecom, which already olds a 49-percent
stake in Velcom, will purchase the remaining 51-percent stake from
the state. This will make Velcom, which has a client base of 2.7
million people and is on the top-twenty list of Belarus' biggest
taxpayers, a fully foreign-owned business. The price and other
details of the deal have not been disclosed.


8. Fewer Companies in the Red

On August 21, the Statistics Ministry announced that 12.4 percent of
all Belarusian companies are operating at a loss, down 14.2 percent
in 2006. The rate has decreased in the industrial sector from 23.2
to 20.3 percent, and the transport sector from 13.8 to 12.4 percent,
while it has increased in the agriculture sector from 1.7 to 2
percent, construction from 11.4 to 13.4 percent, and communications
from 5.7 to 7.1 percent.


9. Minister: Belarus Cannot Do Without Nuclear Energy

Economics Minister Nikolay Zaychenko stated on August 21 that
Belarus cannot do without atomic energy. "In view of that situation
which is developing with Russia and the increasing cost of gas,
power production has become very expensive", he declared, pointing
out that the majority of power stations in the country use gas. The
question of constructing an atomic power station in Belarus,
according to minister, "is essentially decided. In order to provide
the country energy based on locally-produced fuels, we must turn to
non-conventional energy sources."


10. S&P Rates Belarus B+ Long-Term, B Short-Term

On August 21, The Finance Ministry announced that the Standard and
Poor's Ratings Service had bestowed on Belarus a B+ long-term
sovereign credit rating and a B short-term sovereign credit rating.
According to the Ministry, the ratings result from relatively high
wealth and development levels, low general government debt, a
relatively strong external balance sheet, significant economic
potential, and a highly educated workforce. The Ministry said that
this confirms Belarus' economic stability and attractiveness to
foreign investors.

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International Trade
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11. Belarus Eyeing Increased Ties with Vietnam

During an August 20 meeting with Vietnam's Public Security Minister,
President Lukashenko said he hopes to meet the Vietnamese president
to address political and economic cooperation and to possibly sign
further bilateral agreements. At present, annual trade between the
countries amounts to less than USD 50 million, but has experienced
25 percent growth in recent years. Lukashenko said Belarus would
like to become Vietnam's strongest partner in Europe and is
committed to dramatically expanding trade. In a separate meeting at
the headquarters of the Belarusian Almaz anti-terror unit, Interior
Minister Victor Naumov met with Le Hong An, Vietnam's Minister of
Public Security. The two discussed cooperation in law enforcement,
particularly regarding training and anti-terrorism police units.

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12. Quote of the Week
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Is that your final answer? -- Eighteen year-old Tatyana Tishkevich,
whom militia members beat while forcibly dispersing a Solidarity Day
demonstration on August 16:

"I have already submitted the application [to press charges] to the
militia. In the morning the militiaman came to the hospital, but he
didn't want me to write anything. He would ask 'Is it your final
decision to press charges?' I unambiguously answered 'Yes, it is.'"

Moore