21.12.2007: EMBASSY MINSK WEEKLY POL/ECON REPORT - December 21, 2007



UNCLAS SECTION 01 OF 02 MINSK 001045

SIPDIS

SIPDIS

E.O. 12958: N/A

TAGS: PGOV, PREL, PHUM, ECON, ENRG, BO

SUBJECT: EMBASSY MINSK WEEKLY POL/ECON REPORT - December 21, 2007

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

Minsk.

TABLE OF CONTENTS

Civil Society

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- Market Vendors Conduct Nationwide Strike (para. 2)

- Opposition Groups Protest Social Benefit Cuts (para. 3)

- BGKB Resumes Malady Front Criminal Case (para. 4)

- Small Business Activists Jailed and Fined (para. 5)

- BKGB Raids Opposition Office (para. 6)

- Court Denies "For Freedom" Registration (para. 7)

Domestic Economy

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- GOB Purports to Simplify Business Registration (para. 8)

- First U.S. Investment in Belarus´ Banking System (para. 9)

International Trade

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- Direct Investment Increases (para. 10)

Quote of the Week (para. 11)

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Civil Society

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2. Market Vendors Conduct Nationwide Strike

Tens of thousands of market vendors around Belarus took part in a

one-day strike December 19, protesting recently announced hiring

restrictions and last week´s court rulings against five small

business activists. Anatoliy Shumchenko, the leader of the

pro-entrepreneur group Perspektiva, led the strike. Vendors in all

regional capitals except Vitebsk participated. Another association

of small business owners, For the Free Development of Enterprise,

plans to begin an open-ended nationwide strike against the employee

restrictions on January 1, the day the new restrictions are to be

implemented.

3. Opposition Groups Protest Social Benefit Cuts

United Civic Party (UCP) activists demonstrated in Minsk December 15

and distributed leaflets protesting social benefit cuts. According

to UCP Chair Anatoliy Lebedko, authorities denied approval for

approximately 800 rallies across Belarus, but could not prevent

activists from distributing printed materials. Over 10 people

staged an authorized hour-long rally in a remote part of Mogilyov

December 16. About 100 people demonstrated for 45 minutes and

peacefully dispersed in Gomel. Police briefly detained two

opposition youths in central Brest December 16 for passing out

leaflets to protest the cuts, seizing 64 fliers. On December 17, 20

opposition activists organized a flash mob in Brest. Two activists

there were also briefly detained and released without charges.

4. BGKB Resumes Malady Front Criminal Case

The Gomel BGKB December 14 resumed its criminal case against youth

opposition activist Andrey Tenyuta on charges of acting on behalf of

the unregistered organization Malady Front (MF). The BGKB initially

opened a criminal case September 18 after repeatedly questioning

Tenyuta and confiscating his computer during a raid on his

apartment. Tenyuta unsuccessfully petitioned for the return of the

equipment after authorities suspended the case in November. He is

now facing up to two years in jail on charges of "discrediting state

agencies, destabilizing the social and political situation, and

engaging youth with radical propaganda."

5. Small Business Activists Jailed and Fined

A Minsk district court December 17 sentenced small business activist

Nikolay Sergeyenko to ten days in jail on petty hooliganism charges.

The police detained Sergeyenko December 6 during a search of his

offices, charging him with disorderly conduct and using profanity.

In a separate case, a judge in Gomel December 18 fined small

business activist Irina Kaminskaya 350,000 rubles (USD 170) on

charges of violating laws regarding mass events. Kaminskaya has

been active distributing printed materials protesting new business

regulations.

6. BKGB Raids Opposition Office

BKGB officers raided the United Civic Party (UCP) Gomel office

December 14 and seized printed materials and DVDs. The officers

MINSK 00001045 002 OF 002

asserted that they were looking for fliers calling for protests

against social benefit cuts. On December 15, the BKGB searched the

apartment of Gomel UCP office Deputy Head Vladimir Katsora and

confiscated over 5,000 leaflets.

7. Court Denies "For Freedom" Registration

The Supreme Court December 18 upheld the Ministry of Justice´s (MOJ)

registration denial for opposition leader Aleksandr Milinkevich´s

movement "For Freedom" (FF). It is the third registration denial

based on violations of laws governing mass events. The MOJ asserted

that the group´s founding convention held August 11 was illegal and

unsanctioned. FF Deputy Head Yuriy Gubarevich maintained that the

FF would hold additional founding conventions and continue to submit

registration applications.

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Domestic Economy

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8. GOB Purports to Simplify Business Registration

President Lukashenko December 17 signed Decree Number 8, to simplify

the registration process for new businesses. Starting on January 1,

registration agencies will no longer examine application papers,

instead holding applicants liable for any non-compliance with

regulations. The decree also halves the required charter funds of

new businesses, cuts the number of required application papers,

reduces application processing time from twenty to five working

days, and eases the liquidation process.

9. First U.S. Investment in Belarus´ Banking System

Management company Monister Investments Ltd., a Cyprus-based

division of the U.S. firm Horizon Capital, December 14 acquired a

31.5 percent stake in Minsk Transit Bank. Currently, the bank´s

major shareholder (60 percent) is car dealer Atlant-M. Bank

managers in a press conference expressed their belief that Belarus´

banking sector is the country´s most attractive sector for foreign

investors.

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International Trade

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10. Direct Investment Increases

The Belarusian Ministry of Economy reported December 18 that foreign

direct investment has risen during the last three years, totaling

USD 451.3 million in 2005, USD 748.6 million in 2006, and USD 905

million in the first nine months of 2007. According to the

ministry, Russia accounted for 30.4 percent of all foreign

investment in the Belarusian economy in the first nine months of

2007, up from eight percent in the same period of the previous year.

The United Kingdom was the next largest investor in Belarus,

accounting for 19.8 percent of all foreign investments, followed by

Austria (10.9 percent), Switzerland (9.3), Germany (7.2), and Cyprus

(6.8). The industrial sector reportedly received 43.8 percent of

all foreign investments, up from 22 percent in 2006.

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11. Quote of the Week

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BKGB Chairman Yuriy Zhadobin on why his organization no longer

investigates paranormal phenomena:

"Unlike during the USSR, the department is not engaged in studying

paranormal phenomena. [Back then,] we had greater means and

opportunities which we could spend on anything and everything.

Today the situation is different. Then, when society was excited by

something, it entered our sphere of interest. But when it comes to

healers, UFOs and such, we just can´t deal with them any more."

Stewart



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