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Wednesday, May 21, 2008

Belarus likes foriegn investment, Border issues, Weapon sales, Russia, Ukraine, China, Columbia, Sport, Opposition and lots and lots of Polish scandal

  • From the Top...
  • #309

    In Q1 2008, foreign investments in Belarus double to $2.1bln

    From: BelTA
    In Q1 the volume of foreign investment in Belarus doubled to total $2.1 billion. Of them $617 million were direct investment, the chief of the department of international investment cooperation and free economic zones of the Economy Ministry, Vladislav Zolin, told reporters on May 20.

    According to him, the number of foreign companies investing in Belarusian projects has considerably grown. In 2003 there were 2,667 companies with foreign investment. As of January 1, 2008 there were 4,218 of them.

    “The factors contributing to an inflow of investments in the country were improvement of the investment climate, creation of favourable conditions for the activity of foreign companies,” said Vladislav Zolin. At the end of 2007 and early 2008 Belarus adopted more than 30 legal acts to stimulate investments.

    Most investments are channeled into investment projects in industry, communications, construction, agriculture and transport sectors. “However we would like to see more investments in small towns and villages,” the official said. “Decree No 1 foresees special privileges for foreign companies which operate in small and middle towns,” he added.

    According to Vladislav Zolin, at present foreign investments in Belarus come from 71 countries. The biggest investors are the Russian Federation, Ukraine and Azerbaijan (CIS countries) and from Germany, Austria, Switzerland, Poland and Great Britain (Europe).

    “Belarus will continue to improve the conditions for attracting foreign investments,” Vladislav Zolin said. “Belarus hopes to increase their share up to 10-15% of the total investments by 2010,” he added.

    Cooperation with OAO Russian Machines is promising

    Belarus believes the cooperation with OAO Russian Machines is promising, President of Belarus Alexander Lukashenko said as he met with Oleg Deripaska, head of OAO Russian Machines and holding company Basic Element, in Minsk on May 19.

    “I’ve been aware of your proposals, interests of Russian companies in the Belarusian mechanical engineering industry for a long time,” said the head of state. To get maximum profits from projects in order to survive severe competition, it is necessary to work together uniting efforts in view of common goals, added the President.

    Addressing Oleg Deripaska, Alexander Lukashenko said, “We are ready to build relations using market-based civilised methods. I am attracted to proposals you made a year ago”. At that time the relations were decelerated by the fact that Belarus received similar proposals from KamAZ, noted the President. “I am ready to make decisions if we agree on approaches, a common vision of the future,” he added.

    Alexander Lukashenko also stressed, Belarus’ mechanical engineering industry has been essentially upgraded recently. “In principle we may be competitive on our own. But it should be understood that together we will accomplish more,” said the head of state. “We will do it all exclusively in interests of Belarus while you will do it naturally for your own goals,” he added.

    In turn, Oleg Deripaska stressed, “Our companies have been cooperating with Belarusian ones for over 20 years. The need to determine our partners for the next 10-15 years is a strategic issue for us in view of the growing competition on the international market”. Which is why, if it is possible, consumers should get the best terms and decisions should be made.

    “Belarus and Russia will open new markets, this is why how we will compete with European producers is important as well,” noted Oleg Deripaska.

  • Other Belarusian News...

    Parliament to consider Belarusian-Lithuanian agreement on mutual travels May 21

    From: BelTA
    Belarusian MPs intend to adopt a Belarusian-Lithuanian agreement aimed at facilitating mutual travels of individuals, the press service of the House of Representatives of the National Assembly told BelTA.

    At a regular session scheduled for May 21 parliamentarians will consider relevant amendments to the temporary bilateral agreement on mutual travels for citizens of November 26, 2002. The amendments to the temporary agreement were initiated by Lithuania. The new bilateral agreement was inked on December 20, 2007.

    The agreement was brought about by Lithuania’s accession to the Schengen zone. The amendments are supposed to regulate issues related to travels of citizens of the two countries, including simpler visa acquisition procedures for certain categories.

    Citizens of one state, who permanently live in the other state, can cross the border without visas if they have residence permits.

    The agreement specifies categories of citizens, who do not need invitations for getting Schengen visas. They are crews of automobile vehicles that transport cargoes and passengers, crews of trains travelling on regular routes, citizens with hotel vouchers on their way to sanatoriums and recreation homes. The category also includes people, who own living quarters in this territory.

    The amendments to the temporary agreement introduce free visas for kids under 6, students and accompanying teachers on educational trips. Free visas will also be available to participants of cultural, scientific, technological, humanitarian or sports events, holders of diplomatic and service passports, people, who visit the other country twice a year for up to ten days in order to visit graves of relatives. Multiple-entry visas effective for up to three years can be issued to children under 16, people over 65 and first-degree disabled.

    The agreement allows promptly getting a free visa upon information about a grave illness or death of a relative.

    Economic Forum

    Belarus will also share experience in implementation of investment projects in small and medium-size towns at the 4th Belarusian-Lithuanian Economic Forum in Minsk on May 21. The event has been organized by the Foreign and Economy Ministries of the two countries.

    The Belarusian side will be presented by Andrei Yevdochenko, the Deputy Foreign Minister, the Chairman of the Belarusian part of the Belarusian-Lithuanian Commission for Trade and Economic Cooperation, the Lithuania – by Vitautas Nauduzas, the Deputy Economy Minister, the Chairman of the Lithuanian part of the Commission.

    Partaking in the forum will be representatives of the Belarusian Foreign Ministry, the Economy Ministry, other ministries, oblast executive committees and the Minsk City Council, the Belarusian Chamber of Commerce and Industry. Lithuania will be presented by the Economy Ministry, the Industrial Confederation, the Self-Government Association, the Association of Constructors, the Association of the Lithuanian Chambers of Commerce and Industry and regional chambers.

    Taking into account top-priority significance of the economic development of small and medium-size towns, the event will be attended by heads and representatives of the business circles. A plenary session of the forum will provide a state comprehensive programme on development of small and medium-size town settlements in Belarus for 2010, priority cooperation areas, possible investment projects for joint implementation, reports on Belarus investment climate, development of the regional cooperation and experience in implementation of the investment projects in small and medium-size towns.

    Deputies to ratify agreements on CIS Collective Peacekeeping Forces May 21

    From: BelTA
    The House of Representatives of the National Assembly of Belarus is to ratify two international agreements - on the financial, technical and rear services support of the staff of the CIS Collective Peacekeeping Forces, and the guarantees to this staff, BelTA learnt from the press service of the House of Representatives of Belarus.

    Belarusian Defense Minister Leonid Maltsev is to present these agreements to the parliamentarians in the Oval Hall.

    These agreements were signed by Armenia, Belarus, Kyrgyzstan, Russia and Tajikistan. Their objective is to set up a legal base for taking coordinated steps in order to provide legal and social protection to the staff of the CIS Collective Peacekeeping Forces when being on duty and the members of their families. In particular, the list of guarantees includes the preservation of allowances during their participation in the military operations, additional paid holidays for 15 days. In case of death on duty of one of the staff of the CIS Collective Peacekeeping Forces, the members of his/her family have the right for an additional immediate compensation equal to 30 basic units which will be equally distributed among family members.

    According to the agreements, the peacekeeping activities of the CIS Collective Forces will be financed from the funds that are annually allocated for this purpose from the national budgets

    China to increase imports of Belarus potash fertilizers

    From: BelTA
    Chinese fertilizer importers are interested in expanding cooperation with the Belarusian Potash Company (BPC), Guo Yanmin, the Vice-President of the Chinese company CNAMPGC, told reporters at the conference of the International Fertilizer Industry Association (IFA) in Vienna on May 19-21.

    The Vice-President noted that the Chinese market of potash fertilizers stands at nearly 10 million tonnes a year, the major part of which is imported. Potash consumption continues growing in view of the dynamic development of the Chinese agriculture.

    “The Belarusian Potash Company is the largest and most reliable partner of CNAMPGC Company,” the Chinese representative said. He noted that the Chinese company is interested in an increase of imports of Belarusian potash fertilizers. “We are ready for cooperation starting from production and ending with the sales of potash fertilizers at the Chinese market,” CNAMPGC Vice-President noted. The matter can be concerned Chinese investments in Belaruskalii development.

    Other BPC partners presented their proposals on cooperation development with the Belarusian Potash Company at the conference in Vienna. The Indian company IPL plans to increase the imports of potash fertilizers up to 1 million tonnes in 2009. The American company MFA Incorporated praised collaboration with the Belarusian Potash Company. “We are working towards increasing the purchases of BPC products and do not touch upon political issues,” the American company underlined.

    General Director of the International Fertilizer Industry Association Luc Maene noted that this year the IFA conference in Vienna had gathered nearly 1640 companies from different countries. “Today the international market suffers from a serious deficit in potash and other mineral fertilizers. Our main objective is to do all necessary to increase the production of fertilizers,” the IFA General Director said.

    Belarusian Potash Company is an exclusive supplier of potash fertilizers produced by Belaruskalii and the Russia’s Uralkalii to the international market. The company sells its products to Africa, Europe, India, China, the USA, the Pacific region, Central and South America. The company has a well-developed distribution network and representative offices in Beijing (China), New Delhi (India), Singapore, San Paulo (Brazil) and Chicago (USA).

    Belarus to present large investment projects May 30

    From: BelTA
    A presentation of large investment projects being implemented in Belarus will be included into a session of the foreign investments consultative council under the Council of Ministers of the Republic of Belarus, Vladislav Zolin, the head of the department for international investment cooperation and free economic zones of the Economy Ministry, told reporters on May 20. The event will take place in Minsk on May 30. Prime Minister of Belarus Sergei Sidorsky is expected to attend the presentation.

    Partaking in the session will be nearly 500 people, 200 of them are representatives of the foreign companies from Russia, Kazakhstan, Ukraine, Poland, Korea, China and the Netherlands. All foreign investors interested in cooperation with Belarus will be able to deliver their proposals. The session will focus on an opportunity of making Belarus serving well as an investment destination.

    Vladislav Zolin noted that the foreign interest towards Belarus is on a consistent increase. “We are in regular negotiations with foreign companies on possible interaction and sign cooperation agreements with many of them,” he said.

    Participating in the session will be the officials of the UNDP, the International Finance Corporation, the International Bank for Reconstruction and Development and the European Bank for Reconstruction and Development, heads of the ministries, concerns, oblast executive committees and the Minsk City Council, administrations of the free economic zones and Belarusian companies.

    Belarus Agribusiness Week to gather over 300 companies

    More than 300 companies from 13 countries are going to take part in the Belarusian Agribusiness Week on June 10-13, BelTA learnt from the organizing committee MinskExpo.

    It is the third time the Belarusian Agribusiness Week is held as four exhibitions, namely Belagro, Food Industry, Packaging and Labelling, Microclimate and Refrigeration.

    Belagro 2008 is one of the oldest exhibition projects of MinskExpo Company and the largest and most respectable agrarian forum in Belarus. Held for the 18th time, it will gather representatives from Belarus, Austria, Germany, Denmark, Italy, Latvia, Lithuania, the Netherlands, Poland, Russia, Turkey, Ukraine, Finland.

    Belarusian companies of the Industry Ministry and the Ministry of Agriculture and Foodstuffs, will account for the biggest part of the exposition (almost 70%). Among them will be domestic producers of farm machines –Minsk Tractor Works, BelavtoMAZ, Gomselmash, Lidagroprommash, Amkodor, Belagromash and Belagroservis.

    The companies of the Ministry of Agriculture and Foodstuffs will display the achievements in the indigenous cattle-breeding and poultry farming. The booths of the Belarusian National Academy of Sciences will present promising developments of the agrarian science and scientific production supply.

    The programme of the Belarusian Agribusiness Week 2008 will embrace seminars, symposiums and conferences.

  • From the International Press...

    Belarus eyes $500 mln for phone operator sale

    From: Reuters
    Belarus hopes to net at least $500 million in selling state mobile phone operator BeST, with Turkish company Turkcell considered the most likely candidate to buy it, the country's economy minister said on Monday.

    Turkcell TCELL.IS has expressed interest in buying 80 percent of BeST, with the purchase taking place over time.

    "I think we are talking here about a sum no lower than half a billion (dollars)," Nikolai Zaichenko told reporters on the sidelines of the EBRD's annual meeting.

    "We are neither hurrying nor slowing down any deal. This is part of our plans. But I cannot give you a concrete date."

    Belarussian President Alexander Lukashenko first mooted the possibility of fetching $500 million from the sale last year.

    Russian mobile operator MTS (MBT.N: Quote, Profile, Research) has also expressed interest in the Belarussian firm -- Belarus's third largest mobile operator with three percent of the market.

    Lukashenko, in power since 1994, maintains a large state sector and a high degree of central control over economic decision-making.

    But he and government ministers have said in the past year that they want to proceed with targeted privatisation in specific sectors. Zaichenko said Belarus could sell a controlling interest in the Minsk automobile plant -- a truck producer. Such a deal, he said, could not be ruled out, but he offered no details on how big a share might be put on offer.

    Russian truck plant KamAZ has expressed an interest in the Minsk plant. And Lukashenko's press service said the president had discussed the plant's future at a meeting with Russian aluminium magnate Oleg

    But the president's press service said it was not certain that any such deal could be struck.

    "It is a fundamental, conceptual notion that we must unite our efforts," it quoted Lukashenko as saying. "I am prepared to make a decision on this if we agree on a common approach and a common view of the future."

    The head of the central bank, Pyotr Prokopovich, told Reuters last week that Belarus could cede a controlling share in state bank Belinvest to Germany's Commerzbank AG CBKH.DE within four months and give up control of a second bank, Belpromstroibank.

    His deputy, Vasily Matushevsky, said in Kiev on Monday that Belarus was aiming for a high price in the bank selloffs.

    "Let me say straight away -- it will be expensive, at least in terms of the deals which have been previously struck on the Belarussian market," he said.

    Moldovan president meets Belarusian ambassador

    From: Mold Press
    President Vladimir Voronin today met Belarusian Ambassador to Moldova Vasiliy Sakovich, according to the presidential press service.

    The sides discussed prospect of development of the Moldovan-Belorusian relations and considered mainly possibilities of boosting the economic cooperation.

    The officials stressed the need to capitalize the present potential, particularly as regards the increase in exports of Moldovan goods - fruit and vegetable production and Moldovan wines - on the Belarusian market, implementation of cooperation projects in assembling Belarusian tractors and trolley busses in Moldova. The officials appreciated the positive dynamic of the economic exchanges which has been registered between the two countries over the last years, as well as the fact that Belarus ranks fifth among Moldova's trade partners.

    Vladimir Voronin and Vasiliy Sakovich also tackled aspects of a forthcoming official visit to Belarus by the Moldovan president.

    US calls on Venezuela to clarify ties with Colombian rebels

    From: AFP
    Washington on Tuesday called on Caracas to explain its relationship with leftist Colombian rebels, following the discovery of information suggesting that Venezuelan President Hugo Chavez is actively supporting the guerrillas.

    Thomas Shannon, the top US State Department official in charge of Latin America, said that he was "surprised" by the negative reaction from Venezuela and Ecuador to a "neutral" report from Interpol on the authenticity of computer data found on laptops and flash drives captured from rebels with the Revolutionary Armed Forces of Colombia (FARC).

    Bogota says the email messages and documents found in the 38,000 seized computer files prove close links between the FARC -- which Washington considers a terrorist group -- and the leftist governments in Venezuela and Ecuador.

    Some of the data -- which includes email messages describing meetings between guerrilla commanders and top Venezuelan officials including Chavez himself, and allegations that Chavez tried to arm Colombian rebels with help from Belarus -- has been leaked to leading US and Spanish-language media.

    Interpol secretary general Ronald Noble said on May 15 the agency's experts did not find any alteration of the data found on the rebel computer hard drives.

    "I think the stories that have appeared in the Wall Street Journal, in the Washington Post and (Spain's) El Pais and elsewhere, indicate that there is indeed a relationship between the FARC and Venezuela," said Shannon.

    "We look more closely and more carefully as we are trying to understand better the relationship (between Venezuela and the rebels) and its consequences," he said.

    "We will certainly urge the government of Venezuela to make clear what the purpose of that relationship is."

    Washington wants to know "whether or not this relationship can be used in a positive way to help end a four decade long civil conflict in Colombia, or rather the countries are not prepared to stand with a democratic neighbor."

    The computer data was captured when Colombian soldiers attacked a FARC rebel camp in the jungle just inside Ecuador on March 1. The FARC's number two commander, Raul Reyes, was killed in the attack.

    Bogota has said the data proves that FARC is "financed and armed by Venezuelan President Hugo Chavez."

    Chavez has dismissed the Interpol report as a "clown show" that "doesn't deserve serious comment."

    U.S. voices concern over lawyer jailed in Belarus

    From: Ria Novosti
    The U.S. State Department has said it is deeply concerned over the deteriorating health of an American lawyer in custody in Belarus, and urged Belarusian authorities to respond to a release plea.

    Russian-born lawyer Emanuel Zeltser, known for exposing an estimated $10 billion money laundering scheme between a Russian bank and the Bank of New York in 1990s, was arrested by the Belarusian KGB on his arrival in the country on March 12. Media reports said he had been charged with using forged documents.

    "The United States is deeply concerned about the deteriorating health of American citizen Emanuel Zeltser, imprisoned in Belarus," the State Department said in a statement released on Monday.

    The statement said that despite repeated direct requests to Belarusian officials in both Washington and Minsk, Belarusian authorities have only permitted U.S. government access to Zeltser twice.

    During the second visit on April 25, the consular officer noticed a significant physical deterioration in Zeltser's health. Zeltser's brother Mark said Emanuel, who suffers from arthritis and diabetes, had not been permitted to take his required daily medications.

    Because of these serious concerns, on April 25, the Department of State requested Emanuel Zeltser's release on humanitarian grounds.

    "We have yet to receive a response and urge the Belarusian government to respond quickly and favorably to this request," the State Department said.

    The U.S. and the European Union have accused Belarusian President Alexander Lukashenko of clamping down on dissent, stifling the media and rigging elections. Lukashenko, who was re-elected to a third term in 2006, and other senior Belarusian officials, have been blacklisted from entering the U.S. and the EU.

    Tensions between the U.S. and Belarus heightened after Washington imposed sanctions last November against Belarus's state-controlled petrochemical company Belneftekhim and froze the assets of its U.S. subsidiary, demanding the release of political prisoners.

    The measure led to withdrawals of diplomats from both sides.

  • From the Opposition...

    Artur Finkevich in the list of restricted from traveling abroad

    From: Viasna
    One of the Young Front leaders restricted from leaving Belarus since 14 May.

    In the morning of 13 May, when the Young Front deputy head Artur Finkevich was riding in a car with his colleagues to the Belarusian-Lithuanian border (Kamenny Loh), Belarusian customs officers tried not to allow him to cross the border. They explained his name was in the list of temporally restricted to leave Belarus.

    One of the border crossing officers made a decision to permit Finkevich to cross the border.

    In the night of May 14th, when Artur Finkevich and his colleagues were returning to Belarus, Belarusian customs officers called all officials of the customs station as soon as they saw his passport at a passport check-point. As it was found out, all customs officers had been ordered to stop Finkevich , inform him officially he was temporally restricted from leaving Belarus and to stamp his passport with such a restriction.

    Finkevich was invited to the customs station, where an officer told him he was restricted from traveling abroad since 25 April 2008, and gave him a passport stamp that temporally restricts him from leaving Belarus.

    Artur Finkevich commented on the situation: “I think this action was planned by the Belarusian secret services, who tapped our conversations and knew about the planned signing of an agreement and a number of important meetings in Vilnius. So, they were going to break the signing of the agreement and our scheduled meetings. I am thankful to the customs officer, who decided to let me to Lithuania, and I am sure day by day there will be more people like him in all government agencies.”

    Jonathan Moore: “Freedom in Belarus is not a bargaining thing”

    From: Charter '97
    Diplomatic conflict between Minsk and Washington lasts for two months. Due to US economic sanctions against Belneftekhim company the states recalled theirs ambassadors for consultations and reduced embassies’ staff. The US Department of the Treasury has recently said the restrictions are expanded to the company-owned Belarusian Oil Trade House, Lakokraska and Steklovolokno enterprises.

    US Charge d’Affaires in Belarus Jonathan Moore told to “Vremya Novostei” how this conflict could be arranged.

    – Relations may thaw if the situation with human rights in Belarus improves. It looked like it early in the year, when Minsk released some political prisoners. But we haven’t seen positive changes since February.

    – Rumours on possible shutting down of the embassies and diplomatic break have appeared...

    – The US embassy in Minsk works, though only four diplomats remained there. Decisions are taken by politicians. I hope Belarus will have its embassy in the US and the US - in Belarus.

    – The US has said about sanctions on three Belarusian plants. Are they the new sanctions, the US spoke earlier?

    – It is a matter of interpretation. The European Union and the US imposed visa restrictions against Belarusian officials after the presidential elections 2006. In 2007 the US extended sanctions, imposed them to state-run Belneftekhim company. It was a continuation of the previous measures. The Department of the Treasury clarified the sanctions on Belneftekhim’s subsidiaries in March. Three subordinated to the company enterprises, which among other sfall under earlier imposed sanctions, were named. It is not imposing of new restrictions. A decision on further sanctions will be taken in Washington, if the situation with human rights doesn’t improve in Belarus.

    – Can the sanctions be lifted if Alyaksandr Kazulin, Syarhei Parsyukevich and Andrei Kim, considered to be political prisoners by the US, are released?

    – Freedom of democratic activists in Belarus is not a bargaining thing. But release of three political prisoners will be taken positively by Washington. There have recently been six political prisoners, then one Kazulin, now there are three of them (in 2006 former presidential candidate Kazulin was sentenced to five and a half years in prison on a charge of riot organising, in April 2008 Parsyukevich and Kim were sentenced on the case of beating militiamen to two and a half years and a year and a half respectively. – Editor’s note).

    – Alyaksandr Lukashenka said some opposition figures can get to the parliament at September elections. Will it influence the position of the United States?

    – We will follow the elections with great interest. It is important for us that the process, including candidate registration, electoral campaign and voting will be open. It means access of the opposition to state media and possibility for independent observers to observe the votes counting. The estimations will be made on the base of these facts. We find positive the statement of Minsk that Belarus is open for observers from the Organisation for Security and Cooperation in Europe (OSCE).

    – What if the sanctions will push Belarus to closer integration with Russia?

    – Belarus and Russia are neighbours with important economic and cultural ties. We admit the lawful interests of Belarus and Russia to carry on the bilateral policy as they see proper, but we emphasise, the US stands for the sovereignty of Belarus.

    – Pyotr Prakapovich, head of the Belarusian National Bank, said the US sanctions threaten away western investors. It will play into the hands of Russian businessmen...

    – The US agrees with Russia that the Belarusian economy is in desperate need of reforming. Transition to market needs changes in laws, which would prove investors their interests are defended. Without reforms Belarus may face danger, connected with energy prices growth. There is a risk of non-transparent asset sale, which wouldn’t make good for the Belarusian people.

    Opposition politician calls for probe into report implicating Belarus in weapons deal with Colombian rebels

    From: Naveny
    Anatol Lyabedzka, leader of the United Civic Party, has urged Prosecutor General Ryhor Vasilevich to probe reports that Belarus planned to supply weapons to Colombian guerillas.

    Reporting with reference to a source in the Colombian government, the Spanish daily El Pais said on May 10 that the Venezuelan president intended to supply the Revolutionary Armed Forces of Colombia (FARC) with arms with the help of Belarus. The newspaper said that Belarus’ involvement in the deal was revealed in an e-mail found stored on the computer of Raul Reyes, a FARC leader, who was killed earlier this year.

    “In this respect, I am asking you to investigate the facts mentioned by the newspaper El Pais and provide Belarusian citizens with credible information about all deals involving sales of weapons to Latin American countries in the past five years and a report on what the funds raised through the deals have been spent,” Mr. Lyabedzka says in the petition.

    The opposition politician notes that the report has done serious damage to Belarus’ image abroad and revealed the absence of any tools of public control over the executive government in the country.

    The e-mail, sent by FARC top member Ivan Marquez on February 8, said that Mr. Chavez “considered with the Belarusian authorities the possibility of weapons supplies.” “Our Belarusian friend continues work on the package on ways to the black market to solve the problems,” the newspaper quoted the guerilla as saying in the message.

    The e-mail reportedly said that a delegation “from the friend” was to arrive in the Venezuelan capital, Caracas, on February 17 to discuss weapons supplies to the FARC.
    “Angel asked us to be here and reach agreement with the delegation personally,” the e-mail said.

    El Pais said that Angel was Mr. Chavez’s pseudonym and the man referred to as “our Belarusian friend” was Viktar Sheyman, state secretary of the Belarusian Security Council and a member of Alyaksandr Lukashenka’s inner circle.

    The newspaper said that Belarus contracted to supply €720 million worth of weapons to Venezuela in 2007, and that the deal was negotiated by Mr. Sheyman.

    Mr. Sheyman visited Venezuela between February 15 and 19.

    Interpol announced last week that the computer files had come from a rebel camp and had not been tampered with by the Colombian government.

    The Belarusian authorities have denied the report.

  • Around the region...

    EBRD/World Bank urge policy steps to boost investments in Ukraine’s agriculture

    From: FinChannel
    The EBRD and the World Bank called on May 20 for new government policies to help boost investment in agriculture in Ukraine and so unlock the huge potential the country has to increase farming output.

    At a conference on agribusiness one day after the EBRD’s annual meeting in Kyiv, organised together with the Ministry of Agrarian Policy of Ukraine , the two institutions said the current high food prices were a major opportunity for Ukraine , a net grain exporter. Ukraine is one of the few countries in the world that are in a position to significantly increase net exports and make up for emerging deficits elsewhere.

    However, they noted that private investment in farming demand sound and transparent policy but also appropriate infrastructure and investments in public goods. Infrastructure problems include inadequate physical capacity of railway networks, ports, the road system as well as storage and investment in public goods should address issues such as research, extension and farm education.

    A shift in policies and increases in private and public investments could help Ukraine to increase its grain production, possibly to as much as 70 million tons (from around 35 million tons in recent years). The increased production would largely translate into increased export potential.

    It is particularly important to respond to high food prices with appropriate policies and not with short-term reactions such as the introduction of export restrictions, the EBRD and World Bank said

    They also made the following long-term recommendations, saying it is important to:

    Increase investments in storage, handling, transport and market information infrastructure;
    Establish an institutional framework for tradable land titles and lift the moratorium on land sales;
    Develop a regulatory basis to support financing instruments such as warehouse receipts and hedging instruments such as futures markets;

    Significantly increase public investment in agricultural research, development and extension, and in the training of agricultural specialists and farm managers;

    Establish a veterinary and food safety control system compliant with EU regulation and invest in the certification infrastructure that would give Ukraine access to the European market.

    Strengthen the market for agricultural inputs (seeds, fertllizers, equipment and services)
    It is also important to try to deal with the social implications of high food prices. The two banks said the negative impact of higher domestic food prices should be cushioned with targeted social assistance programs. They also noted that the underlying cause of inflation is an overheating economy. Appropriate macroeconomic policies must be put in place to deal with inflation in general.

    “This country has huge potential. With the right policies levels of investment can be increased and output can be increased significantly as well,” said EBRD Agribusiness Director, Gilles Mettetal. “The EBRD is more than prepared to help support this investment”

    “The public and private sectors need to work together to ensure the opportunities Ukraine has in agriculture are fully utilized”, said Paul Bermingham, World Bank Country Director for Belarus, Moldova and Ukraine . “The World Bank is ready to assist the Government in making the transition to a new, market-based policy framework and public investment program.”

    The EBRD can help tackle these challenges and unleash the region’s production potential by

    Supporting investments in the agribusiness sector and related infrastructure;

    Assisting in the development of financing instruments such as warehouse receipts;

    Supporting an effective policy dialogue involving the private sector and government officials at different levels.

    The World Bank can help in the development of appropriate and consistent policies and the provision of key public goods including by

    Building key rural social infrastructure;

    Addressing market failures through upgrading research and extension services, farmer vocational training and information systems;

    Designing appropriate food safety and certification systems;

    Moving towards an efficient system of state support (de-coupled payments) to agriculture;

    Devising targeted social assistance programs for the rural poor and those affected in particular by rising food prices.

    The EBRD is the single largest investor in the agribusiness sector in the region where it operates. Its involvement in the agribusiness sector spans all activities throughout the production chain, from farming, processing and trading to food distribution, packaging and retail.

    The Bank has also played a major role in developing the sector by supporting local and foreign corporate clients as well as micro, small and medium sized enterprises.

    In 2007 the EBRD invested €520 million in the agribusiness sector and expects to invest roughly the same amount this year.

    Most recently the EBRD provided a $20 million loan to Ukraine ’s agribusiness group Astarta, to support its drive to put into operation equipment to achieve higher energy efficiency at its sugar production plants as well as in sugar beet farming operations.

    The World Bank has invested over US$ 5.5 billion in Ukraine since 1992, with around US$ 677 million of commitments in the agricultural sector. It has also provided extensive analytical and advisory services in the sector to help remove obstacles for increased competitiveness. Against the background of the global food crisis, the World Bank prepared a policy note entitled “Competitive Agriculture or State Control: Ukraine ’s response to the global food crisis”, highlighting opportunities for Ukraine to benefit from the current situation on international markets, whilst mitigating the social impact of higher food prices at home.

    Oil-rich Russia ready to take off

    From: This is money
    Sitting high above Red Square in the 02 lounge on the 12th floor of the opulent Ritz Carlton Hotel this does not seem very much like the dour, inhospitable Moscow of the media reports.

    In the bar Chelsea golden boys Andrei Shevchenko and Michael Ballack, in their tracksuits, mix easily with smart locals exchanging comments, signing autographs and soaking up the glittering atmosphere and there is barely a replica football shirt in sight.
    Down below in the lobby a smiling and relaxed Avram Grant sits in the vast lobby lounge, with a couple of cohorts volubly chatting away, without being disturbed.

    There are no signs of the much feared Moscow police, with their large circumference hats. And there are as many Bentleys, dark Range Rovers and Audi limos outside as might be seen parked around the Dorchester.

    Oil-rich Russia is buzzing. On our arrival here the city is celebrating the victory of the Russian national team in the world ice hockey championships. This essentially consists of Moscovites driving their cars up and down the vast boulevards at unimaginable speeds in an urban environment, sounding their horns and hanging out of the sunroofs in daredevil style.

    The speeding German cars now outnumber the Ladas 10 to one as they whizz pass Zara, Canali and the Western designer stores. But there is not a Marks & Spencer or Tesco in sight. Our nation of shopkeepers has not yet had the courage to make the journey from the old Soviet empire of Eastern Europe to Prime Minister Vladamir Putin's mother state.

    Putin, with the assistance of the natural resource economy, has brought a normality to the Russian economy. Oligarch capitalism still exists but has been largely diluted with the powerful moneymen encouraged to sell down their stakes in quoted enterprises, bringing some equilibrium to the capital markets.

    Growth across the economy was 7.9% last year and 7.5% is projected for 2008. And in this deleveraged economy the words credit crunch, which obsess these pages and others, are barely heard.

    There is, as in Britain, an inflation worry, with prices rising at close to 10% a year. This is perhaps not surprising as wage levels are climbing by 20% a year for those in the private sector, bringing a new prosperity to Russia where per capita income is soaring up the international league tables.

    The financial power of the extraction industries means that the so called 'stabilisation fund' – Russia's gift for future generations and its very own sovereign wealth fund – now has L75bn in the bank, up from L45bn from the start of the year.

    Half of this is intended for investment in airports, terminals, new roads and a North-South rail system – a sort of crossrail from the Arctic to the North Sea.

    I am in Moscow with Robin Geffen of Neptune Asset Management. He is one of the Western fund managers brave enough to take the view that Putin's Moscow, despite the perceived political risks as seen by the UK oil majors BP and Royal Dutch Shell, is a great place to invest.

    Neptune's Russian fund is up 230% over the last three years, although 2007 saw it come off the boil because of election uncertainties and the focus of investors on Indian and China funds.

    We visit Polyus Gold, one of the world's top gold producers, with production of 1.214m ounces last year, but a company with a far lower profile than AIM-listed Highland Gold and Peter Hambro Gold.

    It is an unhedged producer, which means that at present everything that came out of the ground was sold at an average market price of $706 per ounce last year.

    It is about to plough an astonishing ?1.3bn of investment into the Natalka project in the Magadan region way to the east of Siberia.

    Polyus may be the pin-up of the Neptune portfolio but the industrial holdings group Sistema, a sort of mini-Russian 3i, receives a poor reception after making its latest presentation.

    It is planning without prior consultation with shareholders to plough money into an embryonic Indian telecoms adventure Shyam, which will pit the group directly against Vodafone and other Western and Indian mobile giants.

    Not a great idea for a company without sub-continent experience and no chief executive. Geffen is visibly angry and warns the investor relations director that such an investment could have dire consequences for overseas investors.

    That evening he confers with a Goldman Sachs trader 'Michael' in the elegant Puskin restaurant in the heart of Moscow. Plans for possibly selling down the Sistema stake are already under way. Western investors can, if necessary, be as ruthless as the oligarchs.

    Rusal to Invest $5bn in West Africa

    From: Red Orbit
    One of the world's largest aluminium producers, Russia's United Company Rusal, has reaffirmed its commitment to Africa despite several operational difficulties. In an exclusive interview with African Business, Alexander Livshits, the company's director for International and Special Projects tells Katrina Manson why Africa is such a crucial piece in its international strategy. Alexander Livshits, Russia's foreign minister in the mid-1990s and renowned for his reform-minded free market principles, says: "In the coming five years, major Russian industrial and mining companies intend to invest as much as $5bn in Africa."

    Linking up its operations in the same part of the world makes complete sense to the company. "We look to develop integrated production processes in specific regions," he adds.

    "We do not regard investing in Africa as a risk, but as an opportunity. We firmly believe the continent is living up to its long-held potential and will emerge as a major region in the international economy over the coming years.

    "By ensuring our raw materials and alumina refining capacity is close to our aluminium smelting operations, we reduce transport costs and can move materials to the smelter more quickly. This maximises our competitive advantage on the world market," he explains.

    There is no doubt the Russian goliath, producing 4.2m tonnes of aluminium and 11.3m tonnes of alumina a year, has a growing commitment to the continent. It has already made its first regional move beyond its base in Guinea. A new smelter in Nigeria, acquired last year, will be able to convert some of the bauxite mined in Guinea into aluminium.

    Over the past five years, the price of aluminium has shot through the roof, with spot prices above $2,900 a tonne and hitting a record high of $3,100/t in May 2006. Some heady analysts predict these will rise next year to as much as $4,500/t. Every scrap of bauxite counts.

    Although six of Rusal's expatriate employees were kidnapped in Nigeria and one of its local drivers was killed in June last year, the company says it is determined not to let the 'unfortunate' incident affect its commitment to investment in Africa.

    The company says this "adheres to its strategy of creating a full production cycle in Western Africa". Africa has a special place in the company's history. It was Rusal's first venture outside the chilly Russian terrain. In 2001 the company took over management of the Compagnie des Bauxites de Kindia (CBK) in Guinea.

    This started a wave of expansions that has picked up Armenia, Australia, Jamaica and Sardinia in its wake, among others. Rusal now has 100,000 workers in 19 countries throughout the world.

    An IPO is expected within three years, and the corporation - formed by the merger of Rusai, Suai and Glencore's alumina assets in March 2007 (with 66%, 22% and 12% stakes respectively) - is shifting its global strategy into place. Fourteen smelters, 10 refineries and four mines are already in place.

    Testing times

    In Guinea, Rusal is looking to exploit the best of bauxite reserves the country has to offer. Guinea is ranked the world's number one bauxite exporter. However, riots during which more than 70 people were killed last year and ongoing confrontations with trade unions and opposition groups, have made investors wary of this West African country.

    The company admits that production at the mine and refinery fell following violent disturbances and the imposition of martial law early last year. As recently as March this year, riots broke out over power outages at Fria lasting three days.

    Rusal, not satisfied with deposits at the CBK mine at Kindia, where production capacity is currently 3.33m tonnes of bauxite a year and expected to rise to 3.8m tonnes a year by 2010, is considering another mine and refinery at the huge Dian Dian site, where capacity could reach a whopping 17.6m tonnes of bauxite and 4.4m tonnes of alumina a year.

    The company says decisions on how to develop the concession are at the feasibility stage, and gives no projected starting date. However, Livshits did say:

    "When Dian Dian comes online it will add significantly to our bauxite reserves and alumina production capacity. The alumina produced will be used within Rusal's global production process, as production will exceed the requirements of our Alscon smelter in Nigeria."

    Currently, Rusal has to make do with only one refinery operating in Guinea at the Friguia bauxite and alumina complex in Fria. The estimated annual production capacity is 2.8m tonnes of bauxite and 780,000 tonnes of alumina. For years it has managed only a desultory performance.

    It will face stiff competition from 2011 onwards once shipments begin from Canadalisted Global Alumina. The Canadian company is building a $4.3bn refinery with a forecast capacity of 3.3m tonnes a year at its concession in Sangaredi.

    Rusal refuses to comment on competition but says it has an expansion plan for its Friguia refinery "which is now pending approval by the local authorities".
    Article continues

  • From the Polish Scandal Files...

    Corrupt Poland

    From: Warsaw Business Journal
    Polish executives downplay the problem of corruption

    Polish executives downplay the problem of corruption, a worldwide survey by Ernst & Young suggests. Almost one in five (18%) of Polish executives admitted to having been offered a bribe, compared to 14% in Western Europe. Yet only 16% see it as a cause for concern, against 25% in Western Europe.

    "As many as 60 percent of our Polish respondents did not know whether their subordinates were ever offered a bribe." said Mariusz Witalis of E&Y Polska.

    Police Catch Polish Test Fraudsters

    From: NWE
    Two young men from the north-eastern city of Bialystok face up to three years' in prison after one of them got caught taking the matura school leaving exam for his friend last week. The examination board became suspicious when the 20-year-old presented an ID with a picture that did not look like him and called the police.

    “The man admitted that his two-years-older friend had talked him into it,” said local police spokesman Jacek Dobrzynski.

    Apparently the 22-year-old wanted to retake the test to get into a better university programme and asked his “genius” friend to take the test for him to increase his chances. Both men, whose names were not released, stand accused of making false statements in an official situation.

    Opposition accuses government of ‘sloth’

    From: The News
    Members of the largest opposition party, Law and Justice (PiS), have negatively summed up the performance of PM Donald Tusk's government after its first six months in office.

    Opposition politicians accuse the present cabinet of ‘sloth’ and being ‘plagued’ by the following ten negative phenomena: rising prices, privatisation of hospitals, stalling road construction, lack of public finance reform, destruction of the public media, lenient approach to criminals, as well as mismanagement of EU funds.

    However, according to PiS politicians the cabinet is primarily plagued by the action – or lack of action - by Prime Minister Tusk himself, who instead of presenting concrete projects and policies, delivers ‘barbecue-style addresses’, said MP Beata Kempa (PiS), referring to the address Tusk delivered 1 May, Poland's national holiday, which was widely criticized by the opposition as being bland and lacking in detail.

    The opposition has been critical recently of government plans to reform the health care system in Poland, claiming that this is merely privatization by stealth. The government retors that it only wishes to make hospitals self contained financial units which would remain under the control of local governments.

    But Kempa said that the case of former PO-member Beata Sawicka, caught ‘red-handed’ while taking a bribe during a 'sting' operation prepared by the Anti-Corruption Bureau on 1 October, was instructive. Kempa said that Sawicka commented to bureau officers that she wanted to obtain benefits from the future ‘privatisation of Polish hospitals’.

    Kempa said the proposed health care reforms were a ‘huge mess, greatly alarming doctors, nurses and society at large’.

    The government is to present its own evaluation of its first six months in power after Prime Minister Tusk returns from a trip to South America, whose length and light duties critics have dubbed ‘the PM’s Latin American holiday’.

    First Politician Jailed in Sex Scandal

    A Lodz court on Monday sentenced the first of three politicians accused in the sex-for-jobs scandal that helped bring down Poland’s last coalition government, signalling there may be trouble ahead for two of the party’s leaders who are also on trial.

    Samoobrona (Self-Defence) rural protest party official Jacek Popecki was sentenced to 28 months in jail for giving a woman, who had accused his party’s boss of fathering her child, drugs to induce a miscarriage.

    In late 2006, Aneta Krawczyk accused the party’s firebrand leader Andrzej Lepper of having offered her political favours for sex in 2001, and then said he had been the father of her youngest child. She said the same of Lepper’s close collaborator and MP, Stanislaw Lyzwinski, and accused him of rape and sexual abuse. She also said that Popecki, who had been Lyzwinski’s aid, had tried to induce a miscarriage by giving her a labour-inducing drug called oxytocin.

    Lepper and Lyzwinski both stand accused of extorting “favours of a sexual nature” from Krawczyk and face up to eight and ten years in jail respectively if convicted. Prosecutors had sought a four-year sentence for Popecki.

    “The evidence given by the victim [Krawczyk], which is largely backed up by testimony from two witnesses and phone billings as well as the behaviour of the accused after these events, points to [Popecki’s] guilt,” the court said on Monday.

    After Krawczyk’s initial lodging of charges, DNA tests showed that neither Lepper nor Lyzwinski had fathered her child, but testimony from other women convinced prosecutors to push on with the investigation in what became known as the “sex for work” scandal.

    The trial was conducted behind closed doors to protect the victim’s privacy, even though Krawczyk originally accused Lyzwinski and Lepper in the glare of television floodlights. The revelations came while the party was part of a coalition headed by the conservative Law and Justice (PiS) and was among a series of public rows that led finally to the downfall of their government.

    Poland’s National Institute of Remembrance denies digging for dirt on Prime Minister

    From: Axis Globe
    According to Polish Radio, the spokesperson for the Poland’s National Institute of Remembrance (IPN) has firmly denied media allegations that the institute has been searching for compromising material on Prime Minister Donald Tusk.
    IPN’s Andrzej Arseniuk commented on the recent story from the portal, which published an excerpt from a recent interview with the current Prime Minister: "I heard that a couple of historians from the IPN intensively cooperated with Law and Justice politicians before the campaign," said Tusk.

    This might mean, according to the portal, that the institute was digging for dirt on Tusk before the 2005 presidential and parliamentary elections, in particular, any evidence of his eventual contacts with the Communist secret services. Arseniuk assured that no such operation took place.

    Dazed and confused in days of yore

    From: Polskie Radio
    He took pot, drank some, and flew in the face of Catholicism – Newsweek portrays Prime Minister Donald Tusk from a somewhat different perspective.

    He experimented with marijuana, did not refuse a drink, grew up revolting against the Church – journalists from the Newsweek weekly uncover unknown facts from the life of Polish Prime Minister Donald Tusk. The weekly says that Polish mass media avoid going too deep into private lives of Polish politicians. Newsweek, on its part, decided to ask Tusk about everything – from family matters, including a crisis in his marriage at one point in the past, his attitude to religion as well as about alcohol and drugs. On the latter, he admits that in his youth he smoked marijuana grown by a friend and unlike former US president Clinton does not pretend that he did not inhale. All this and more can be read in a book about Donald Tusk, which will appear next week. This is not an interview with Tusk’s seal of approval, but a version of his life as seen by Newsweek journalists – and it’s not politically correct, the weekly says. It points out that Tusk’s popularity ratings remain high. Poles like his rule of love, based on opposition to what they were offered by his predecessors from the Law and Justice party. The premier is skillfully using the mass media to build his image of a popular politician and promote his aim which is to win presidency in two years from now, Newsweek comments.

    Polish health care system is breeding corruption and fraud

    From: News
    Wprost claims that the Polish health care system is breeding corruption and fraud. Doctors and hospital managers accuse the Health Care Fund of putting the cost of medical services at too low a level and giving them too little money while in reality they are cheating the fund to suck out more money from it. If we add to that notorious palm greasing, fraudulent use of hospital property for private needs and plain mismanagement, the bleak picture of the Polish health care sector would be complete. Wprost says that in 2008 Poles will spend almost 47 billion zlotys in health care contributions to maintain this ineffective system. This is almost one third more than two years ago. But politicians claim that this is not enough. Premier Donald Tusk wants to raise health care contributions and the same time the ruling Civic Platform has recently distanced itself from its own plans to privatise the health care sector, which it actually badly needs, says Wprost.

  • Sport...

    The Defender, Alive and Well at the Stag Belarus Open

    From: ITTF
    Hou Yingchao the master of disguise
    The age of the defensive player is over; there is no room in the modern game for the player who gains success by executing the backspin art of play, the expedite rule is archaic, it is not required.

    How many times have I heard such comments?

    Time and again but may I suggest that the defender lives and having watched the Koreans Kim Kyung Ah and Park Mi Young play each other on the ITTF Pro Tour in both Brazil and Chile, where both asked to start the matches under the expedite principle, then there is more than hope in the future for the athletic defensive artist. Furthermore, the rule is a necessity.

    It is a fact that is endorsed at the Stag Belarus Open, due to start in Minsk on Thursday 22nd May 2008; in both the Men’s Singles and Women’s Singles events, two of the four top seeds are defenders.

    Beijing Magician
    First and foremost there is “Merlin”, the magical Beijing magician Hou Yingchao; in the Men’s Singles event he is seeded two behind the host nation’s Vladimir Samsonov.

    Short pimples on the backhand, reversed rubber on the forehand, he has the ability to change the degrees of backspin on the ball with subtle variations and when required, unleash a lethal forehand topspin.

    Surely, he has every right to be acclaimed the world’s greatest defensive player of the present era.

    Drilled Holes
    The difference between the man from Beijing and the rest of the world is quite staggering when it comes to the backspin art.

    Just ask England’s Matthew Syed what it was like playing Sweden’s Fredrik H?kansson; in the Men’s Singles event at the European Championships in Eindhoven in 1998, the Swede drilled holes in the Englishman’s racket.

    Matthew Syed conceded that his adversary was an expert against backspin play.

    Nine years later in Zagreb in the Men’s Singles event at the Liebherr World Championships Hou Yingchao beat Fredrik H?kansson with consummate ease; the response from the Chinese ace. “Well, he’s not that good against defence!”

    Well, not against the defensive skills of Hou Yingchao.

    It is the clever changes of spin that are the hallmark of Hou Yinchao’s play, whilst for the defenders from the host nation on duty in Minsk it is the “thou shalt not pass theory that reaps rewards”.

    Evguenij Chtchenine is seeded three in the Men’s Singles event ahead of Austria’s Daniel Habesohn, whilst in the Women’s Singles event Viktoria Pavlovich is seeded two ahead of twin sister Veronika and Turkey’s Hu Melek.

    Defence First
    Viktoria Pavlovich and Evguenij Chtchenine are true to the former Soviet Union traditions in sport; make sure your defence is in good order and then consider attack.

    Look at the football, basketball, volleyball and similar teams from the age of the Soviet Union and I’m sure they followed that theory; defence first, attack second.

    Does this mentality come from the fact that the country suffered so greatly at the hands of Napolean and then in two World Wars, eventually leading to the creation of “buffer states” which the British Prime Minister, Winston Churchill referred to as the “Iron Curtain”.

    Quite simply defend your territory against possible invasion.

    Has it been the same in sport for those who learnt their trade in the era of the Soviet Union and the “Cold War”.

    Both Evguenij Chtchenine and Viktoria Pavlovich are safe players, utterly reliable; they break the hearts of their opponents with their solid defensive strategies, long pimples on the backhand, reversed rubber on the forehand.

    To complete the quartet at the Stag Belarus Open, there is the top seed in the Women’s Singles event, Li Qian of Poland.

    She is “Little Miss Perfect”, her style honed in Baoding near Beijing where such players as Gao Jun and Niu Jianfeng learnt their skills; her technique for defensive play is absolutely perfect.

    Balance, poise, control, subtle changes and a quick attack when the chance arises make her the model player and the favourite for gold but she could have one major problem.

    A certain Veronika Pavlovich, the attacking twin, is rather good against defence; she’s been practising against that style of play since birth, and if there is one player that Li Qian and Viktoria Pavlovich may want to avoid then I know the answer.

    There will be no hesitation, Veronika!

  • Endnote...

    Surprise, surprise: Polish beauty jailed kidnapping and torture

    From: The Argus
    A Polish beauty who lured her former boyfriend into a torture trap has been jailed for six years.

    The two men who held him captive and tortured the victim will both spend the next eight years behind bars.

    Karolina Fedyna sweet-talked Lukasz Matysek to her flat in Hove with the promise of sex and a reconciliation.

    But the real motive on her mind was revenge after the 20-year-old left her without paying a debt.

    Mr Matysek was beaten with baseball bats, burned with cigarettes and cut with a knife during his 24-hour ordeal.

    At the same time a party was taking place in the next room and revellers were pressured into joining in the assaults.

    Toby Fitzgerald, prosecuting, said Fedyna and Mr Matysek lived together in London in 2006.

    He owed her ?150 for rent after they split up and Fedyna moved to a flat in Brunswick Place, Hove.

    She was intent on getting her money back and lured him into visiting her with the promise of re-starting their sexual relationship.

    Fedyna greeted him with a kiss on the doorstep on June 2 last year, and led him into what appeared to be an empty flat.

    When he emerged from the bathroom he was confronted by her by her new boyfriend Konrad Kornatowski, 25, and Bartolniez Ziaja, 25, who also both lived there.

    Kornatowski, who was jailed in Poland for being a prostitute's pimp, grabbed Mr Matysek.

    He was bound with duct tape and beaten at first every ten minutes and then every hour until the next morning.

    He was shoved under a table while Kornatowski, Fedyna's new boyfriend, celebrated his 'name day' with a party in the flat.

    Mr Matysek was brought out from time to time and beaten as part of the entertainment and others were encouraged to join in.

    Fedyna slipped into a masseuse outfit and posed for saucy pictures during the party.

    Mr Matysek's attackers forced him to hand over his bank card and PIN number and withdrew cash from a machine in Western Road, Hove.

    His attackers were caught after they ordered him to phone a friend to get more money put into his account.

    The friend became suspicious and called police who raided the flat the next morning.

    Because he was tied and his eyes were covered Mr Matysek could not identify exactly who had tortured him.

    Fedyna, Kornatowski and Ziaja pleaded guilty to false imprisonment and blackmail at an earlier hearing and were sentenced at Hove Crown Court today.

    Selwyn Shapiro, defending Kornatowski, said: "These offences were completely inexcusable but stem from an affair of the heart.

    "This was a curious love-triangle and that may explain why he behaved in the way he did."

    Tony Loader, defending Fedyna, said she had tried to stop the attacks on Mr Matysek when she thought he had had enough.

    Louise Sweet, defending Ziaja, said he had only been in England for a few weeks and knew nothing about the plan to torture the victim before it happened.

    Judge Anthony Niblett told them: "I am fully satisfied that you two men were the first to use violence towards Mr Matysek.

    "You continued to use violence throughout the period he was held captive.

    "You are both responsible for imprisoning him, tying him up, beating him repeatedly yourselves and torturing him."

    Detective Constable Andrea Stroud, one of the investigating officers, said: "This was a just sentence and I am sure that the victim will be pleased with the outcome."