BELARUS WEEKLY POL/ECON REPORT - August 1, 2008

UNCLAS SECTION 01 OF 02 VILNIUS 000622

AMEMBASSY MINSK SENDS
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON ENRG BO
SUBJECT: BELARUS WEEKLY POL/ECON REPORT - August 1, 2008


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

TABLE OF CONTENTS

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

- Militia Disbands Youth Tent Camp (para. 2)
- Nomination of Representatives to Precinct Election Commissions
Continues (para. 3)
- Opposition Parliamentary Hopeful Takes Employer to Court over
Illegal Dismissal (para. 4)
- Five Percent of Initiative Groups Denied Registration for
September Parliamentary Elections (para. 5)

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

- Belarus Will Solicit Tender Bids for NPP Construction (para. 6)
- Standard and Poor's Affirms Belarus Sovereign Credit Ratings
(para. 7)
- Growing Investment (para. 8)

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

- Turkcell Buys 80 Percent of Belarus' Cell Phone Operator BeST
(para. 9)

Quote of the Week (para. 10)
--------------

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


2. Police Disband Youth Tent Camp

Activist of the European Belarus campaign Dmitriy Borodko told
Belapan news agency July 26 that police detained about 50 youth
activists near Borisov that same day. Young people wanted to spend
the weekend in a tent camp, which was co-sponsored by the civil
initiative "European Belarus" and to study fundamentals of
democratic society and election campaigning. Police harassed many
detainees on the way to Borisov and did not bother to call parents
or minors' legal representatives. Police checked ID's, took
fingerprints and wrote many detainees up for making a bonfire in a
forest. Everybody was released without trial on the same day.


3. Nomination of Representatives to Precinct Election Commissions
Continues

Secretary of the Central Election Commission (CEC) Nikolay Lozovik
told the Belapan news agency July 29 that political parties, NGO's,
labor collectives and citizens are free to nominate representatives
to the country's 6485 precinct election commissions for September
parliamentary elections. The deadline for submitting applications
to 5-19 person commissions is August 10. Local authorities will
review applications and establish commissions by August 13. In the
meantime, CEC chairperson Lidiya Yermoshina said during a
Belapan-organized online conference that CEC "will try to take note"
of EU suggestions on the registration of candidates and election
observation.


4. Opposition Parliamentary Hopeful Takes Employer to Court over
Illegal Dismissal

Leader of the local Belarusian Popular Front cell in the city of
Kobrin (Brest region) Alexander Mekh told Belapan news agency on
July 28 that he had filed a lawsuit against his employer,
Beltransgaz, seeking reemployment and compensation of material and
moral damage. Earlier this month his supervisor and the local
Belarusian KGB chief threatened to dismiss Mekh unless he opted out
of the parliamentary election race. Mekh ignored the threat and was
fired but famously recorded and publicized the talk on the internet.
The recording was forwarded to the CEC, which, according to CEC
chair Yermoshina, re-forwarded it to the General Prosecutor's
office. The story seems to be far from being finished.


5. Five Percent of Initiative Groups Denied Registration for
September Parliamentary Elections

According to Belapan, the CEC announced that as of July 29, 23
potential initiative groups out of 455 applicants were denied
registration, or roughly five percent of the total. United
Democratic Forces received two denials, thus bringing the number of
their registrations to 95. The UDF information center has reported
no serious violations of the Electoral code at this stage but noted
that registration of candidates would show if (and how much) the
authorities can be trusted in the coming election campaign.


VILNIUS 00000622 002 OF 002


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Domestic Economy
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6. Belarus Will Solicit Tender Bids for NPP Construction

Both Russia's Atomstroyexport and France's Areva responded on July
29 to Belarus' Energy Ministry invitation to participate in a tender
for the construction of a Nuclear Power Plant (NPP). According to
Belapan, certain Belarusian scientists and officials informally
opined earlier this month that Atomstroyexport is the best option
for Belarus for a variety of reasons. Belarusian officials stated
that American-Japanese Westinghouse-Toshiba ignored the invitation
for only for political reasons.


7. Standard and Poor's Affirms Belarus Sovereign Credit Ratings

Standard and Poor's reportedly affirmed sovereign credit ratings it
gave Belarus a year ago. The country again received B plus in hard
currency, BB in long-term loans in national currency and B in
short-term loans in hard currency and the forecast for all ratings
is stable. Although the country's political system is uniquely
centralized, which makes the government's decision less predictable,
incomes in the country are "relatively high," state debt is low and
economic potential is strong. S&P also notes that higher energy
bills did not hit Belarus' economy as much as was originally
expected.


8. Growing Investment

Speaking at Belarus' government regular session on July 29, Deputy
Prime Minister Vladimir Semashko said the country's economy received
(through June 2008) 2.8 times more investment than a year ago. The
share of foreign investment in total investments was 1.4 percent.
Semashko also noted that most investments in the first six months
were channeled to commerce and services, while the government is
seeking to ensure more investment in industrial and agricultural
sectors in the first place.

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


9. Turkish Turkcell Buys 80 Percent of Belarus' Cell Phone Operator
BeST

Belarus' government press service told Prime-Tass that Turkey's
Turkcell signed an agreement on July 29 to buy 80 percent of
Belarus' GSM cell phone operator Best. Turkcell will pay USD 500
million (or USD 600 million according to conflicting reports) in
four installments. State-owned BeST is one of Belarus' three GSM
cell phone services providers. It was established in 2004 at the
initiative of Lukashenko, who vowed that the state would provide
affordable cell phone services to everybody. The company started
its operations in December 2005 but has never been commercially
viable. At present, it has 187,000 customers, while the total
number of cell phone users in Belarus is estimated 7.5 million.
Turkcell allegedly hopes to secure the remaining market slot of 1
million people.

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Quote of the Week
--------------


10. Speaking to senior officials of Brest region on the
implementation of the 2005-2010 Agricultural Rehabilitation Program,
Lukashenko said:

"The situation on the world food market has drastically changed for
the worse -- we see a heavy food crisis. Today, revolts of the
hungry spread all over the world...No matter how tough it may sound,
God gifted us this situation (rising food prices) the way He gifted
it to oil extractors".

MOORE
LEADER