BELARUS WEEKLY POL/ECON REPORT - August 22, 2008

UNCLAS SECTION 01 OF 03 VILNIUS 000696

AMEMBASSY MINSK SENDS

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL PHUM ECON ENRG BO
SUBJECT: BELARUS WEEKLY POL/ECON REPORT - August 22, 2008


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

TABLE OF CONTENTS

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

- Fewer Parliamentary Hopefuls Apply For Registration (para. 2)
- Opposition Hopefuls Banned From Registration (para. 3)
- Solidarity Demonstration Participants Detained (para. 4)
- Parliamentary Hopeful Fined (para. 5)
- Democratic Seniors Hold Founding Convention (para. 6)
- Regime Frees Three Political Prisoners (para. 7)
- Popular Weekly Editor Questioned Over July 4 Bombing (para. 8)

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

- Core Inflation Accelerates To 6.1 Percent in Jan-July (para. 9)
- Belarus Reports Low Unemployment Rate (para. 10)
- Individual Incomes Up 11.4 Percent in Jan-June (para.11)

Energy
--------------

- U.S.-Japanese Company Unable To Participate in a Nuclear Project
(para. 12)

Foreign Trade
--------------

- Russia Remains Belarus' Main Trading Partner (para. 13)

Quote of the Week (para. 14)
--------------

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


2. Fewer Parliamentary Hopefuls Apply For Registration

Central Election Commission (CEC) Secretary Nikolay Lozovik
announced August 20 that the number of parliamentary hopefuls who
have submitted registration applications to the CEC dropped to half
of their 2004 level. The CEC received only 365 applications, and
six constituencies will have uncontested elections. Lozovik also
noted the "low level of activity" of political parties due to
"internal conflicts and leadership problems." He added that only 39
persons have been nominated by opposition political parties to run
in the elections.


3. Opposition Hopefuls Banned From Registration

On August 18, the police detained for three hours Grodno-based
United Civic Party (UCP) leader Yuri Istomin for allegedly
"campaigning early" in the town of Novogrudok. Authorities seized
260 copies of leaflets containing information about UCP activities.
Istomin called the detention "illegal," as police deliberately
prevented him from applying for registration at the Grodno electoral
precinct before the deadline at COB August 18. Belarusian Christian
Democracy party member and parliamentary candidate Aleksey
Aleksandrovich also missed the deadline because he was summoned to
the police department in Lepel on August 18 and released late that
evening without charge.


4. Solidarity Demonstration Participants Detained

Police apprehended five European Belarus civil campaign activists in
central Minsk on August 16. The activists were rallying in protest
of detention of political prisoners on the Day of Solidarity,
observed monthly by the opposition. All five were released three
hours later without charge.


5. Parliamentary Hopeful Fined

On August 15, a Vetka district court fined Belarusian Christian
Democracy party member and parliamentary candidate Konstantin
Zhukovskiy BYR one million (USD 475). Zhukovskiy was charged with
purported violations in the transiting procedures for the restricted
Chernobyl zone following his detention July 30 as he collected
voters' signatures endorsing his candidacy. He called the fine
"groundless" and maintained he would appeal to a higher court.


6. Democratic Seniors Hold Founding Convention

On August 17, a group of pro-democratic retired seniors held a
founding conference to establish the "Nashe Pokoleniye" association,
which will work on protection of retirees' rights and raise their
awareness about the political ad social situation in Belarus. This

VILNIUS 00000696 002 OF 003


was the group's second attempt to file for registration with the
Ministry of Justice (MOJ),following a registration denial in 2007.
The group reportedly convened at a "secret" location due to a number
of refusals to rent state-owned venues.


7. Regime Frees Three Political Prisoners

President Lukashenko signed August 15 a clemency edict to release
opposition leader and political prisoner Aleksandr Kozulin on the
following day. At a press conference on August 20, Kozulin
maintained he would only accept his "complete acquittal," called his
clemency "humiliating," and urged public protests if 2008 elections
were not recognized as "free and fair." On August 20, Lukashenko
pardoned jailed entrepreneurs Andrey Kim and Sergey Parsyukevich.
Kim dismissed his sentence as well as the grounds for his release as
"illegal," and Parsyukevich committed to pursue political activities
as he had lost his job and business license during his
incarceration.


8. Popular Weekly Editor Questioned Over July 4 Bombing

On August 19, police summoned Sergey Malinovsky, chief editor of the
popular weekly, Antenna, to testify in connection with the July 4
bombing. Malinovsky reported that he was fingerprinted, questioned
extensively, and warned that he could be called in again.

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


9. Core Inflation Accelerates To 6.1 Percent in Jan-July

The Statistics Ministry reported on August 20 that the rate of
inflation reached 0.7 percent in July and 6.1 percent in
January-July. Foodstuff prices increased 0.7 percent and 8.1,
non-food prices - 0.6 and 3.6 percent, and service prices -1.2 and
7.4 percent in July and January-July, respectively.


10. Belarus Reports Low Unemployment Rate
Economic portals reported August 15 that Belarus' officially
registered unemployment rate reached 0.9 percent of the economically
active population as of August 1, 2008. The number of registered
unemployed persons declined by 9.5 percent on year to 42,300 persons
in July 2008. Women accounted for 63 percent of the unemployed, and
young people under 30 years of age for 40 percent. The highest
rates of 1.3 percent were registered in the Brest and Vitebsk
oblasts.

11. Individual Incomes Up 11.4 Percent in Jan-June

The Statistics Ministry announced on August 18 that
inflation-adjusted incomes of Belarusian citizens rose by 11.4
percent in January-June 2008. Incomes per capita reached BYR
597,000 (USD 280) a month, an increase from BYR 468,000 (USD 218) in
January-June 2007. Approximately 83 percent of all income was spent
on commodity and service payments, and the latter grew by 15.8
percent on the year.

--------------
Energy
--------------

12. U.S.-Japanese Company Unable to Participate in Nuclear Project
Deputy Energy Minister Mikhail Mikhodyuk announced on August 20 that
the U.S.-Japanese Westinghouse-Toshiba has officially confirmed it
will not bid for construction of the Belarusian nuclear power plant.
Mikhodyuk cited lack of an interstate agreement based upon which
the company could supply equipment for the Belarusian plant.
Meanwhile, the Ministry received a proposal from the Chinese
Guangdong Nuclear Power Group to cooperate in nuclear power
engineering.
--------------
Foreign Trade
--------------


13. Russia Remains Belarus' Main Trading Partner

On August 19, the Statistics Ministry released a report reflecting
that Belarus traded with 171 countries in January-June 2008,
exporting goods to 128, and importing from 157 states. Russia
remained Belarus' main trading partner with a share of 49 percent of
total foreign trade. Belarus' exports to Russia increased by 42
percent year-on-year to USD 5,579.7 mln and imports increased 70
percent to USD 12,431.6 mln. The Netherlands, Ukraine, Germany,
Poland, Latvia, the United Kingdom, China followed with shares of
9.2, 6.9, 4.5, 3.9, 3.1, 2.6, and 2 percent, respectively.

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


14. Freed 2006 Presidential hopeful and former political prisoner
Aleksandr Kozulin said at a press conference on August 20 that he

VILNIUS 00000696 003 OF 003


felt "no indications of a stroke, heart attack, or food poisoning"
and held the regime liable for any possible "unpleasant" incidents
that could happen to him. He also called himself "a nightmare that
flaps in the night" for Lukashenko.

MOORE
LEADER