EMBASSY MINSK WEEKLY POL/ECON REPORT - January 18, 2008

UNCLAS SECTION 01 OF 02 MINSK 000032 SIPDIS SIPDIS E.O. 12958: N/A TAGS: PGOV PREL PHUM ECON ENRG BO SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - January 18, 2008 ¶1. The following are brief items of interest compiled by Embassy Minsk. TABLE OF CONTENTS Civil Society -------------- - More Entrepreneur Leaders Jailed (para. 2) - BKGB Detains Journalists, Raids Apartment (para. 3) - Activist Journalist Banned From Travel (para. 4) - BPF Invites Perspektiva members to Join Party (para. 5) - Independent Paper Fined for Libel (para. 6) - Protestant Community Cleared of Charges (para. 7) Domestic Economy -------------- - Inflation Highest Since 2004 (para. 8) - Belarus Short of Domestic Investment Targets (para. 9) International Trade -------------- - Foreign Trade up 24 percent to USD 51.5 billion (para. 10) - Russian Concern Acquires Insurance Company (para. 11) Quote of the Week (para. 12) -------------- -------------- Civil Society -------------- ¶2. More Entrepreneur Leaders Jailed A Minsk district court sentenced Vitebsk-based small business leaders Sergey Parsyukevich and Aleksey Tolstyko January 15 to fifteen days incarceration on charges of participating in the unsanctioned January 10 entrepreneurs' demonstration. Parsyukevich was summoned to a police station in Vitebsk and transported to Minsk on January 13. The police arrested Tolstyko near his home January ¶15. ¶3. BKGB Detains Journalists, Raids Apartment The BKGB and police officers detained independent journalists Vladimir Samoilov, Galina Samoilova, and cameraman Valery Buldyk in Minsk January 12. Police alleged that the recording equipment they were using - which was their own - was stolen. Police questioned the journalists for three hours about their work for the Poland-based Belsat satellite TV channel and confiscated the equipment. In a separate incident January 12, the BKGB raided the flat of independent journalist Sergey Podsasonniy and seized his computer equipment and a video camera on the pretext of investigating his involvement in the opposition youth organization Malady Front. ¶4. Activist Journalist Banned From Travel Authorities have placed Malady Front member Boris Goretskiy on its travel ban list. The activist, who currently works for "Nasha Niva" newspaper and Radio Racija, was expelled January 17 from a train in Gomel en route to Kyiv to attend a seminar there for radio journalists. Goretsky stated that since he has no pending fines and there are no open criminal cases against him, the ban in his case is clearly politically motivated. ¶5. BPF Invites Perspektiva members to Join Party Belarusian Popular Front (BPF) deputy chairman Ales Mikhalevich invited Perspektiva members to join his party January 15, saying "the BPF fully supports the fair fight by entrepreneurs and employees for their right to work and the preservation of small business in Belarus." After the Ministry of Justice announced plans earlier in the week to liquidate the group, Perspektiva's deputy head Olga Krumina stated that if Perspektiva is liquidated, its members may either establish a political party or join an existing opposition group. ¶6. Independent Paper Fined for Libel A court in Mogilyov Oblast has upheld a libel suit against the publisher of local independent newspaper "Volny Horad." The editor of the government-controlled newspaper "Leninskiy Klich" filed the lawsuit based on an article in "Volny Horad" headlined "Six Years in the Editorial Gulag" written by a former journalist with "Leninski Klich." The court imposed a fine of 500,000 rubles (USD 235) on the independent paper and ordered it to pay 300,000 rubles (USD 140) in litigation fees. MINSK 00000032 002 OF 002 ¶7. Protestant Community Cleared of Charges On January 11 a Baranovichi district court dismissed administrative charges against the local New Generation Protestant community. Authorities had alleged that the community violated their land lease contract by using a building constructed on the plot for religious purposes without proper permits. Protestant lawyer Sergey Lukanin welcomed the court's verdict saying it was a "positive example" and a triumph of justice in one of the multiple cases against Protestants. -------------- Domestic Economy -------------- ¶8. Inflation Highest Since 2004 The Belarusian Ministry of Statistics announced January 14 that the country's inflation rate for 2007 was 12.1 percent, the highest since 2004. Authorities had planned for inflation of six to eight percent. Food prices grew 15.9 percent last year, non-food prices rose 5.9 percent, and consumer services prices increased 10.5 percent. Speaking to Parliament on January 11, Prime Minister Sergey Sidorskiy blamed ministers and local governments for the price increases, and demanded that inflation be held to planned levels in 2008. The Ministry also reported that GDP in 2007 increased 8.1 percent to USD 44.67 billion, industrial output rose 8.5 percent, and agricultural production grew 4.1 percent. ¶9. Belarus Short of Domestic Investment Targets Belarus' Deputy Economics Minister Tatyana Starchenko announced January 11 that the country lacks sufficient domestic investment resources to meet 2008 targets, which are 25 percent higher than in ¶2007. Starchenko said the government would work to attract more foreign and private investment, especially in rural areas and small towns. The government has already reduced the tax burden in 2008 by 0.9 percent. In addition, authorities have established a working group to outline ways to improve the country's investment climate, including inviting large transnational corporations to ensure steady investment flows. -------------- International Trade -------------- ¶10. Foreign Trade up 24 percent to USD 51.5 billion Belarus' Customs Agency announced January 11 that foreign trade rose 24 percent in 2007 to a record high USD 51.5 billion. Imports and exports rose 27 and 21 percent respectively. Russia was Belarus' largest trade partner with 49 percent of total trade, while the EU accounted for 32 percent. Belarus' key exports are oil products, potash fertilizers and tractors. Major imports are gas and oil, which account for about a third of all imports. ¶11. Russian Concern Acquires Insurance Company Russia's RESO insurance group announced January 14 in Minsk that it acquired 100 percent of Belarus' AlVeNa insurance company. RESO officials did not comment on the transaction sum paid for AlVeNa or the book value of this company. RESO is a holding company with insurance, medical services, leasing, and development concerns across the CIS. -------------- ¶12. Quote of the Week -------------- Head of the Belarusian Central Electoral Commission Nikolay Lozovik, on the problems caused by election observers: "Belarus and Russia should think about restricting OSCE [election] observers. They had 12 observers in Poland, 20 in the US, but 700 in Belarus. Why were there so many for us? By those proportions, two would have been enough for Belarus, but we could allow a few dozen. When there are more of them than members of the electoral commission, observers just get in the way of our work." Moore