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Cablegate: Embassy Minsk Weekly Pol/Econ Report - December 21, 2007

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RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHSK #1045/01 3551033
ZNR UUUUU ZZH
R 211033Z DEC 07
FM AMEMBASSY MINSK
TO RUEHC/SECSTATE WASHDC 6749
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHVEN/USMISSION USOSCE 1771
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK

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
-------------
- 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
----------------
- GOB Purports to Simplify Business Registration (para. 8)
- First U.S. Investment in Belarus´ Banking System (para. 9)

International Trade
-------------------
- Direct Investment Increases (para. 10)
Quote of the Week (para. 11)
-----------------

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

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
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.

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

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.

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

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.

----------------------
11. Quote of the Week
----------------------

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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