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

UNCLAS SECTION 01 OF 02 VILNIUS 000261

SIPDIS

AMEMBASSY MINSK SENDS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON ENRG KCRM BO
SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - April 18, 2008


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

TABLE OF CONTENTS

Civil Society
--------------

- Vitebsk Opposition Activists Fined and Detained (para. 2)
- Independent Journalist Jailed (para. 3)
- Internet Child Porn Ring Members Arrested (para. 4)
- Activists Pray for Return of Monastery (para. 5)
- Activist Fined for Protest against Chemical Plant (para. 6)
- Soligorsk Malady Front Members Fined Heavily (para. 7)

Domestic Economy
--------------

- Decree Issued to Promote Investment (para. 8)
- Belarus to Reform Telecoms to Meet WTO Requirements (para. 9)

International Trade
--------------

- Priorbank Financed 20 Percent of 2007 Crude Imports (para. 10)
- Belneftekhim Needs USD 6 Billion in Investment (para. 11)

Quote of the Week (para. 12)
--------------

--------------
Civil Society
--------------


2. Vitebsk Opposition Activists Fined and Detained

Police detained opposition youths Yuliya Mikhailova and Viktoriya
and Kristina Chizh in central Vitebsk April 16. Activists gathered
to demonstrate in solidarity with imprisoned opposition members
Aleksandr Kozulin, Andrey Kim, and Sergey Parsyukevich. Police
ordered the demonstrators to disperse and apprehended the three
youths, releasing them four hours later without charges. In a
separate incident, prominent Vitebsk-based opposition activist Boris
Khomayda was fined BYR 175,000 (USD 82) April 11 for distribution of
independent printed media. The police arrested Khomayda March 14
and seized copies of the independent newspapers "Nasha Niva" and
"Narodnaya Volya."


3. Independent Journalist Jailed

A Minsk district court sentenced independent Borisov-based
journalist Anatoliy Udovichenko April 15 to two weeks in jail for
distribution of illegal leaflets. Police arrested Udovichenko the
previous day in central Minsk and charged him with violating
regulations governing mass events. Udovichenko was allegedly
passing out leaflets urging individuals to attend a demonstration
set for April 26 to mark the anniversary of the Chernobyl tragedy.


4. Internet Child Porn Ring Members Arrested

Counter-Cyber Crime Department Deputy Director Andrey Miklashevich
informed the media April 11 that three organizers of a child
pornography ring were arrested in Belarus in early 2008 on charges
of distribution of pornographic material. The ring operated via the
internet and provided access to over 270 child pornography websites.
Miklashevich added that the department opened its investigation in
June 2007 and that more than 10 suspects had already been
questioned. He also noted that police confiscated a database with
users' credit card information and commended the FBI's assistance in
collecting evidence to investigate the case.


5. Activists Pray for Return of Monastery

Over 100 activists gathered on the steps of the former Bernardine
monastery in central Minsk April 14 to pray for the return of the
building to the St. Joseph Catholic community and to protest its
conversion into a hotel and entertainment center. They lit candles,
read prayers, and sang religious hymns for about an hour. Police
observed the gathering, but no one was detained and the activists
dispersed without incident.


6. Activist Fined for Protest against Chemical Plant

A Maryina Gorka regional court sentenced Druzhniy resident Sergey
Obrazovskiy to a BYR 1.4 million (USD 655) fine April 11 for
organizing a rally there. Over 500 Druzhniy residents gathered
March 22 to protest the scheduled construction of a chemical

VILNIUS 00000261 002 OF 002


manufacturing and fertilizer recycling plant near the town. The
activist asserted that the authorities randomly arrested him as a
scapegoat for protests, and that residents will launch another
signature-collecting campaign to petition the Council of Ministers
to halt the plant's construction. An appeal previously sent to
Aleksandr Lukashenko received no reply.


7. Soligorsk Malady Front Members Fined Heavily

On April 11 a Soligorsk district police panel for juvenile
delinquency fined under-aged Malady Front (MF) members Ivan Shilo
and Kristina Samoilova BYR 1,050,000 (USD 490) and Andrey Tychina
BYR 700,000 (USD 330) for participating in an unsanctioned rally in
Soligorsk March 2 to protest social benefits cuts. Shilo and
Samoilova received additional fines, together with MF activist
Grigoriy Ostapenya, for holding an unauthorized demonstration March
25 to celebrate the Belarusian People's Republic's 90th anniversary.
Shilo's father also received a BYR 525,000 (USD 245) fine for his
son's "poor behavior."

--------------
Domestic Economy
--------------


8. Decree Issued to Promote Investment

Aleksandr Lukashenko signed Edict 204 on April 14 allowing companies
to reduce reported taxable profit in order to redirect funds towards
investment in government-approved projects. The edict, which comes
into effect retroactively starting January 1, 2008, reverses the
rule that forced businesses to use post-tax profits for investment.
The edict applies only to investment in housing construction and
repayment of bank loans issued for investment purposes.


9. Belarus to Reform Telecoms to Meet WTO Requirements

The Ministry of Telecommunications announced April 15 that it is
committed to further reform the country's telecommunications
industry to ensure greater competition and compliance with WTO
requirements. State-owned Beltelecom is scheduled to lose its
monopoly on transmitting internet traffic and its exclusive access
to fixed-line telephony when Belarus' law on electronic
communication is amended some time in autumn this year.

--------------
International Trade
--------------


10. Priorbank Financed 20 Percent of 2007 Crude Imports

According to Yelena Shishenko, a senior official of Belarus' private
Priorbank, her institution financed 20 percent of the country's
crude oil imports in 2007. Shishenko made the announcement at an
international conference on Belarus' oil and chemical industries in
Minsk April 11. Priorbank issued USD 1.7 billion worth of loans to
Belarus' two oil refineries and other businesses that procure
Russian crude oil for Belarus. The current lending mechanism
provides for banks to finance 80 percent of the cost and clients to
pay 20 percent using oil and petroleum products as collateral.


11. Belneftekhim Needs USD 6 Billion in Investment

Belneftekhim official Viktor Plotnikov announced at the conference
noted above that the company and its subsidiaries plan to secure a
total of USD 430 million in foreign investment in 2008. He added
that Belneftekhim currently has over 80 reconstruction and upgrade
projects planned and will require more than USD 6 billion in
investment by 2010. Investment in the petrochemical industry as a
whole should exceed USD 1.54 billion in 2008, an increase of 25
percent from 2007.

--------------

12. Quote of the Week
--------------

Aleksandr Lukashenko at a roundtable on educational reform, on why
basic education should revert to the Soviet eleven-year system, from
the current twelve-year model:

How is it that educators on the one hand can talk about accelerated
educational development for students, but on the other hand keep 17-
and 18-year old young people behind school desks? Seriously, it's
already time for 18- and 19-year-old girls to start giving birth,
and that's what they're already doing in your schools anyway.

Moore
Leader