MID SIZE CITY IN BELARUS: ACTIVIST MORE CONFIDENT BUT

UNCLAS SECTION 01 OF 02 MINSK 000359

SENSITIVE
SIPDIS

DEPT FOR EUR/UMB (JOE WANG)

E.O. 12958: N/A
TAGS: PGOV PHUM ECON BO
SUBJECT: MID SIZE CITY IN BELARUS: ACTIVIST MORE CONFIDENT BUT
PRIVATE BUSINESS LESS

MINSK 00000359 001.3 OF 002



1. (U) Summary: On August 5, 2009 Chargi Scanlan visited
Borisov, the second largest industrial center (pop 150,000) in
the Minsk Oblast, where he met with the local authorities, state
and private businesses, opposition political parties and civil
society. While the authorities praised improvements in the
business climate and civil freedoms, democratic activists and
entrepreneurs expressed skepticism and stated that government
pressure continued but in a more subtle way. For activist,
however, that meant more space, but for entrepreneurs it was
resulting in a decrease in profitability. End Summary.

Harassment Continues But More Subtle But That Creates Space
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2. (U) Members of political parties and civil society
organizations in Borisov told the Chargi that the GOB's pressure
has become more subtle. Detentions have been replaced by fines
and harassment, such as threats not to prolong work contracts.
This pressure forces activists and their relatives employed by
state enterprises to work "underground" in order not to lose
their jobs. They also mentioned that it was more difficult to
operate in the regions than in Minsk. People are banned not only
from organizing events in Borisov but also from attending events
in Minsk. At the same, time democratic community representatives
noted that this subtle pressure was not as disruptive as the
previous overt harassment or detention had been, thus it was now
easier to reach out to the public with their message. They also
feel more confident in their effort to register their parties
and organizations because the government feels increasingly
compelled to work through a "legal" framework.

Officials: Private Sector Booming; Opposition: It's a Mirage
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3. (U) The Mayor of Borisov reported on the favorable climate
for small private businesses in the region noting quick
registration and simplified tax policies. As an example, Borisov
Executive Committee officials cited a successful entrepreneur
running a market and the growing number of small businesses that
have registered despite the crisis. The Mayor also expressed
interest in attracting American businesses to the region, to
which the Chargi responded that the latter prefer to work with
private sector and in free market conditions, and are
independent from the USG in their decisions. Consequently, CDA
advised the Mayor to do everything possible to promote the
expansion of the private sector in his city.


4. (U) Independent entrepreneurs, however, expressed skepticism
concerning the official economic statistics, which show
sky-rocketing number of small businesses. Such skepticism is
reinforced by official decrees like Decree 760 that limits
private entrepreneurs to employing family members only, which
forces private entrepreneurs to restructure their businesses by
subdividing them into a number of smaller businesses thus
creating an artificial increase the number of individual
entrepreneurs. Another superficial increase in the number of
entrepreneurs occurred when state factories due to the financial
crisis put workers on part time schedules which then forced
workers to register as private entrepreneurs, as a safety
measure to a possible future unemployment. GOB's policy of full
employment means that in Belarus there is really no unemployment
safety net to speak off. As workers pointed out to Charge the
most they could count on if laid off was $17 a month in
unemployment benefits.


5. (U) Private entrepreneurs also told the Chargi that
businesses operations had become more difficult because of the
crisis and harsh regulations. The ban on selling beer and light
alcoholic drinks in kiosks, and rental payments tied to the EURO
had put many entrepreneurs out of business. To combat this trend
the entrepreneurs started a legal support group that provides
assistance in defending their rights. This group also
distributes information to various groups in order to capitalize
on the growing discontent among workers, especially those that
have experienced shortened work schedules and reduced salaries.

Independent Media Scraping Through But Demand Growing
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6. (SBU) According to Anatoly Bukas, Chief Editor of an
independent newspaper "Borisovskiye Novosti" [Borisov News,
circulation 7,000], there are twelve independent regional
newspapers around the country that have been banned from state
subscription and distribution networks. Only "Bobruisky Courier"
(circulation 2,600) is allowed into the state distribution
system. The other twelve continue to operate, though at a
disadvantage to state newspapers as they are forced to pay
higher-priced commercial postage rates plus didn't have access

MINSK 00000359 002.3 OF 002


newspaper kiosks so they must find other platforms to sell their
papers from. At the same time, Bukas noted that the economic
crisis is making people search for answers and thus other
sources of information than the state media, thus increasing the
demand for independent newspapers.

Comment
--------------


7. (SBU) As part of Lukashenka's efforts to appease Western
audiences? Local authorities are clearly feeling increasingly
obliged to keep their pressure against democratic activists more
subtle. This, however, has had unforeseen consequences for the
authorities as it has given political parties, civil society and
independent media more opportunities to reach out to people
making them more confident. Small businesses however exist in
much harsher conditions now and only those that have protection
from the authorities manage to profit and expand. While, the
authorities in Borisov seem to realize the need to improve the
business climate and attract investors, they are not willing to
alter the existing system maintaining that it has already been
sufficiently changed. End Comment.
SCANLAN