EMBASSY MINSK WEEKLY POL/ECON REPORT - March 28, 2008

UNCLAS SECTION 01 OF 02 MINSK 000223

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON ENRG PARM VE BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - March 28, 2008


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

TABLE OF CONTENTS

Civil Society
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- Protestant Pastor Charged (para. 2)
- Gomel Opposition Youth Sentenced to Jail (para. 3)
- Residents Protest Chemical Plant Construction (para. 4)

International Relations
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- GOB to Send Military Specialists to Venezuela (para. 5)

Domestic Economy
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- Budget Surplus 10.2 Percent of GDP (para. 6)
- Overall Tax Burden Rises (para. 7)
- Number of Loss-Making Businesses Declines (para. 8)

International Trade
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- Korean Business Delegation Arrives (para. 9)

Quote of the Week (para. 10)
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Civil Society
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2. Protestant Pastor Charged

The Minsk city prosecutor's office issued administrative charges to
New Life Church (NLC) Pastor Vyacheslav Goncharenko March 24 for
organizing a signature campaign to petition amendments to the 2002
religion law. Prosecutor Yuriy Karpitskiy informed Goncharenko that
the campaign violated regulations concerning individuals' ability to
initiate changes and amendments to enacted legislation. On March
21, similar charges were brought against NLC lawyer Sergey Lukanin.
In addition, Goncharenko is facing a fine of up to BYR 700,000 (USD
325) for denying utility inspectors access to the NLC building.


3. Gomel Opposition Youth Sentenced to Jail

A Gomel district court sentenced opposition youth activist Andrey
Tenyuta to 10 days in jail March 21 for violating the public order.
Police detained Tenyuta the previous day when a stranger attempted
to attack him. The activist maintained the assailant was "most
likely a freelance BKGB agent" ordered to provoke him in order
isolate him ahead of the March 25 Belarusian People's Republic 90th
Anniversary demonstration.


4. Residents Protest Chemical Plant Construction

Residents of the southeastern town of Druzhniy rallied March 22 to
protest the scheduled construction of a chemical manufacturing and
fertilizer recycling plant near the town. Civil society activist
Nikolay Pokhabov noted that over 500 people came out to demonstrate
and "say no to poisonous chemicals." Police officers observed the
rally but did not intervene. The demonstrators announced plans to
initiate a local referendum and erected a cross at the construction
site. They earlier submitted a petition to Aleksandr Lukashenko
signed by 1,000 residents calling for a halt to construction and
expressing concerns about potential health risks.


5. GOB to Send Military Specialists to Venezuela

Deputy Chief of the Belarusian Armed Forces General Staff Pyotr
Tikhonovskiy announced at a March 25 press conference that
Belarusian military advisors and experts will visit Venezuela to
assist Caracas in improving its air defense and electronic warfare
system. The visit is part of a bilateral agreement Aleksandr
Lukashenko signed during his official visit to Venezuela in December

2007. Tikhonovskiy noted about a dozen military specialists will
visit in 2008, with larger groups to follow.

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Domestic Economy
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6. Budget Surplus 10.2 Percent of GDP

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A Finance Ministry official announced March 24 that the country's
central budget showed a surplus of USD 766.4 million in January and
February. Central budget revenues increased 18 percent while
expenditures increased 13 percent.


7. Overall Tax Burden Rises

Belarus' Tax Ministry announced March 25 that the overall tax burden
on the country's economy in 2007 increased 1.6 percent to 47.3
percent of GDP. Indirect taxes decreased by 1.3 percent to 16.5
percent of GDP, while the share of direct taxes edged up one tenth
of one percent to 9.3 percent. Other taxes amounted to 9.8 percent
of GDP and transfers to the Social Security Fund remained steady at
11.7 percent of GDP.


8. Number of Loss-Making Businesses Declines

Belarus' Statistics Ministry announced March 25 that the proportion
of loss-making businesses decreased to 16.6 percent as of February
1, down from 21.9 percent a year ago. For industrial businesses,
20.9 percent operated at a loss, down from 28 percent in 2007. For
the agricultural sector, according to GOB reports, only 8 percent
operated at a loss, down from 14.6. The average return on sales in
January was 13.8 percent, up from 11.7 percent a year ago.

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International Trade
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9. Korean Business Delegation Arrives

Prime Minister Sergey Sidorskiy received a delegation of South
Korean businesspeople March 24 to discuss cooperation with Korean
car manufacturers. According to Sidorskiy, Belarus hopes to
establish joint enterprises for manufacturing trucks, truck
components and other products in Belarus. Sidorskiy also announced
plans to meet with the CEO of Korea's LG Group to discuss a new
liquid crystal display assembly project in Belarus. Also during
the visit, Belarusbank, Belarus' largest financial institution,
signed a memorandum of cooperation with GoodMorning Shinhan
Securities, one of Korea's largest securities companies. The Prime
Minister visited Korea in late 2007, to discuss investment
opportunities offered by Belarus in the energy and banking sectors.


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10. Quote of the Week
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Valentin Sukalo, Chariman of the Supreme Court, apparently ignoring
his own suggestions:

"Our system of punishment should not only be based on law, but
should be supported by the people. Considering that 88 percent of
crimes are non-violent, imprisonment should be applied sparingly."

Moore