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Today's Headlines for:
Wednesday, October 29, 2008

President Meets China Guangdong Nuclear Power, Russian money, IMF loan, UN trafficking, Opposition, Ukraine, Polish football, Culture and Sport

  • From the Top...
  • #356

    President Meets With Top Management of China Guangdong Nuclear Power Company

    From: BelTA and the Office of the President
    Te president during a meeting with the top management of China Guangdong Nuclear Power Company
    While choosing a company for building the nuclear power plant, Belarus will be guided exclusively by pragmatic purposes and conditions of safety of the future plant, said President of the Republic of Belarus Alexander Lukashenko at a meeting with the top management of the China Guangdong Nuclear Power Company (CGNPC).

    “It is a very important project. Safety of a nuclear power plant for a country situated in the centre of Europe also means the country’s international responsibility to its partners and neighbours,” said Alexander Lukashenko.

    Alexander Lukashenko once again emphasized that while choosing the project of the future nuclear power plant, preference would be given to the one which would be safer, cheaper and of better quality. “ We will hold a fair contest . If your corporation proposes more advantageous conditions and undertakes to build a nuclear power station in Belarus which will be safe according to all world standards, cheap and of high quality, you will be chosen to build it. If another company proposes better variants, naturally that company will be chosen to build it,” said the President addressing the top management of the China Guangdong Nuclear Power Company.

    The Belarusian leader highlighted the big experience of the Chinese company in building nuclear power stations. He said, “The fact that you build nuclear power plants in China by yourself, have experience in it and cooperate with the world’s biggest companies, that you are able to design and build a nuclear power plant 100 per cent by yourself – all this is worth a lot”.

    Alexander Lukashenko thanked the top management of the Chinese company for coming to Belarus and assured them that he was prepared to discuss all the nuances of the possible construction.

    Alexander Lukashenko: state pins hopes on youth in Belarus’ development

    In a related story, on October 29, President of Belarus Alexander Lukashenko congratulated his people on the 90th anniversary of Komsomol (Youth Communist League), BelTA learnt from the president’s press service.

    “The biography of many generations has been directly linked with the history of the Komsomol that has always been a hardcore in reaching the country’s most strategic goals: abolition of illiteracy, industrialization, protection of the Motherland during the Great Patriotic War, virgin land development, riches of Siberia, Far East and North, patriotic education, popularization of the healthy way of life. Student construction teams, children and youth competitions Golden Puck and Leather Ball have never lost their importance. The best Komsomol experience is in great demand among the modern youth,” the Head of State said.

    According to the President, the jubilee festive celebrations give an opportunity to express gratitude to the Komsomol veterans for preserving intergenerational continuity and invaluable experience – a foundation that unites the present-day youth.

    “Today Komsomol’s rich history and best traditions are continued by the Belarusian Republican Youth Union that aims at constructing a strong and prosperous Belarus, the state for the people. The country pins hopes on its young people for major developments and achievements, energy and persistence in the implementation of the most ambitious and breakthrough plans for a new-quality living standards, high technologies and a prominent place among the most developed countries,” Alexander Lukashenko said.

  • Other Belarusian News...

    Vladimir Andreichenko nominated as Speaker of lower house

    From: BelTA
    Deputy Vladimir Andreichenko was nominated to the post of the Speaker of the House of Representatives of the fourth convocation at the first parliamentary session on October 27, BelTA informs.

    Deputy of the House of Representatives Sergei Semashko who nominated Vladimir Andreichenko to the post said that Vladimir Andreichenko has been governor of the Vitebsk oblast executive committee for 14 years. Vladimir Andreichenko has brought together a group of like-minded persons and owing to his all-out efforts the Vitebsk oblast has grown into a well-developed industrial region, Sergei Semashko said. The exports of the commodities over the last five years have trebled, and increase by 25-30% year-on-year.

    Vladimir Andreichenko was a deputy of the Belarusian Supreme Council of the 12th convocation and “was one of the first creators of the Belarusian legislation”, Sergei Semashko said. Vladimir Andreichenko also worked in the Council of the Republic of the National Assembly of Belarus.

    No other candidatures for the post of the Chairman of the House of Representatives have been nominated.

    Vladimir Andreichenko hopes for better relations between Belarus’ Parliament and PACE, OSCE

    The House of Representatives needs to develop international cooperation and strengthen contacts with big international parliamentary organisations, Vladimir Andreichenko, a candidate to the post of the Speaker of the House of Representatives of the fourth convocation, said when speaking in the Parliament.

    He expressed hope that the newly-elected deputy corps will contribute to the strengthening of Belarus’ positions in the international community. “We are for the relations without double standards with PACE, OSCE and other international parliamentary organisations,” Vladimir Andreichenko said.

    The new parliament does not start from scratch. “The previous parliament has done a lot to develop the legislation aimed at promoting the sustainable social and economic development of Belarus,” he stressed. In his opinion, the Parliament should be working on ensuring the high level of stability of the national legislation which key positions should be common sense and interests of people. “New laws should be well-considered and timely,” Vladimir Andreichenko said. Concerted action of MPs will help preserve positive creative attitude in the society, he is sure.

    “Some would like the new Belarusian parliament to become a centre of instability. We will give no grounds for such illusions,” Vladimir Andreichenko said.

    UN bolsters Belarus’ approaches to UN GIFT development

    From: BelTA
    The UN General Assembly and Secretariat supported Belarus’ approaches towards the development of the UN Global Initiative to Fight Human Trafficking (UN GIFT). The statement was made at the meetings between Deputy Head of the Administration of the President of the Republic of Belarus Natalya Petkevich, UN GA Chairman Miguel d’Escoto Brockmann and UN First Deputy Secretary General Asha-Rose Mtengeti Migiro in the UN headquarters in New York, BelTA learnt from the Permanent Representative Office of the Republic of Belarus in the UN.

    The sides detailed Belarus’ initiatives to improve the coordination of global efforts in combating trafficking in persons and developing the UN relevant plan of actions.

    The UN officials praised the Belarus’ timely initiatives and supported its efforts in reaching multilateral agreement on the resolution and the UN member-states full involvement in the implementation of these initiatives.

    Natalya Petkevich’s meetings in New York show an increased number of the countries supporting the global vision proposed by the President of Belarus in 2005 on the ways and mechanisms to improve and intensify the fight against modern-day slavery.

    Alexander Lukashenko: state pins hopes on youth in Belarus’ development

    From: BelTA
    On October 29, President of Belarus Alexander Lukashenko congratulated his people on the 90th anniversary of Komsomol (Youth Communist League), BelTA learnt from the president’s press service.

    “The biography of many generations has been directly linked with the history of the Komsomol that has always been a hardcore in reaching the country’s most strategic goals: abolition of illiteracy, industrialization, protection of the Motherland during the Great Patriotic War, virgin land development, riches of Siberia, Far East and North, patriotic education, popularization of the healthy way of life. Student construction teams, children and youth competitions Golden Puck and Leather Ball have never lost their importance. The best Komsomol experience is in great demand among the modern youth,” the Head of State said.

    According to the President, the jubilee festive celebrations give an opportunity to express gratitude to the Komsomol veterans for preserving intergenerational continuity and invaluable experience – a foundation that unites the present-day youth.

    “Today Komsomol’s rich history and best traditions are continued by the Belarusian Republican Youth Union that aims at constructing a strong and prosperous Belarus, the state for the people. The country pins hopes on its young people for major developments and achievements, energy and persistence in the implementation of the most ambitious and breakthrough plans for a new-quality living standards, high technologies and a prominent place among the most developed countries,” Alexander Lukashenko said.

  • Economics...

    Loss-making companies in Belarus to account for 4.7% in 2008

    From: BelTA
    By the end of 2008, non-profitable enterprises in Belarus are to account for 4.7%, including 9.3% in the industrial sector. By late 2008, their number will be 500 and 300 respectively, Economy Minister of Belarus Nikolai Zaichenko said at the session of the Council of Ministers on October 28.

    The share of weak enterprises in Belarus fell from 12.9% in January-August 2007 to 7.6% over the eight months of 2008. The share of the non-profitable enterprises in the industry fell from 21.1% to 13.1%.

    This has been the result of the measures on financial rehabilitation undertaken in the previous years. These measures include the state support of the weak enterprises, administrative methods of various forms and a wide use of reorganization procedures, Nikolai Zaichenko said.

    According to him, this issue is particularly acute for the Bellegprom and Bellesbumprom concerns and some companies of the Brest oblast.

    “Main hopes rest on the implementation of business-plans to ensure the efficient work of enterprises, Nikolai Zaichenko said. In H1, it did not work. 80% of non-profitable enterprises do not follow the business-plans developed by them.”

    New accents in Belarus foreign economic policy prompted by global crises

    Belarus will shift accents in the foreign economic and financial areas in the period of the global crisis, Economy Minister of Belarus Nikolai Zaichenko said at the session of the Council of Ministers on October 28.

    He noted that Belarus should prevent the slowdown of the economic growth. The priority task therefore is to step up cooperation with foreign investors interested in investing their money in the Belarusian economy.

    In order to raise the efficiency of foreign economic activity the governmental bodies should avoid any risks. The budget and foreign currency reserves spending should be optimized and limited to immediate needs. Foreign trade partners should be pressed for discounts and payment deferment, the minister said.

    The imported equipment should be put into operation in due time and used with the highest efficiency possible. Every top manager should focus their efforts on the reduction of accounts receivable for exported goods.

    According to Nikolai Zaichenko, “there is nothing unusual about these requirements, these are classical approaches, they are employed by every careful manager at every enterprise.”

    The National Bank and the banking system as a whole should quickly undertake additional measures to secure the stability of the Belarusian ruble, ensure continuous financial support of the productive sector of the economy, and preserve gold and currency reserves. Such approaches will help countervail the damage that may be brought about by the global financial crisis, the minister said.

  • From the International Press...

    IMF says to meet top Belarus officials this week

    From: Guardian
    An International Monetary Fund mission said on Monday it would hold talks soon with top Belarussian officials, who have asked the fund for a $2 billion cushion against the impact of the global financial crisis.

    The talks with the ex-Soviet state follow a preliminary agreement between the IMF and Ukraine on a $16.5 billion standby loan and a "substantial financing package" with Hungary. Iceland and Serbia are amongst others who have turned to the Fund.

    "The IMF mission has only just begun its work. We have planned meetings with the head of the central bank, with the finance and economy ministers and the deputy prime minister in the next two to three days," an IMF official said.

    Belarus, traditionally close to Russia both politically and financially, has taken tentative steps towards Western investors in the past year, selling some state assets to European firms and planning its debut Eurobond.

    That issue had to be postponed due to poor market conditions as the credit crunch spread across the globe.

    Although officials say the crisis has not hit Belarus directly, the country has a large proportion of debt that is short-term -- 60 percent of a total of $14 billion.

    It is also spending central bank reserves to prop up the Belarussian rouble currency, which is pegged to the dollar.

    Reserves have dipped to $4.9 billion in September from $5.6 billion.

    Aside from delaying the Eurobond issue, Minsk also postponed its privatisation projects this month, denying the budget further revenues.

    It has already agreed on a $2 billion loan from Russia, which supplies Belarus with most of its gas needs.

    The economy grew a robust 8.1 percent last year and authorities have pencilled in a target of 8-9 percent this year.

    Russia to give Belarus credit of $1 bln in November

    From: Itar Tass
    Russia will give Belarus a credit of one billion dollars in November 2008, the second tranche of one billion dollars will be given in the first quarter of 2009, Russian Deputy Finance Minister Dmitry Pankin said in an interview with the economic news agency PRIME-TASS.

    “We’ll give one billion dollars in November this year and one billion dollars - - in 2009 after the adoption of amendments to the federal budget for 2009. In the first quarter of 2009, these funds will be allocated,” he said.

    As the deputy minister said, credit conditions are still being discussed. They will be close to market ones. The credit is being given for 15 years with a five-year privileged period of payments of the main debt. “We plan that these credits will be connected with the adoption of a plan of joint action where measures of economic character, which the Belarussian and Russian sides will take, will be defined. Issues of the currency rate and an access of Russian companies to the Belarussian market will be recorded in it. It will include issues of privatisation in Belarus and a balance of payments, too. That is, we plan to adopt programmes of action in the economic field,” Pankin said.

    Touching upon Belarus’ possibility to attract an IMF credit of two billion dollars, Pankin said that this issue was discussed at talks with Belarus. “We don’t see any contradictions with the fact that Russia, in its turn, provides a credit,” he said.

    Speaking about Belarus’ entrance to the Russian stock market with placing of bonds, Pankin said: “Nobody has removed this issue. However, it is clear that it is impossible to place securities of Belarus at the current market. This issue wasn’t discussed yet and won’t be discussed, probably, until the situation in the financial market settled down. It’s doubtful that it will take place in 2-3 months.”

    He also said that additional conditions of giving the credit connected with the use of the rouble as a currency of payments, as well as a reserve currency haven’t been coordinated yet. “There is an understanding that it is also necessary to mention issues of using the Russian rouble in mutual trade. We haven’t agreed yet how all this will be finally formulated,” Pankin said.

    Belarusian Test for Russia and the West

    From: Kommersant
    The global financial instability will affect the lineup of forces in the post-Soviet countries as strongly as the Russian-Georgian conflict did. Both crises, each in its own way, have shown that pressure will be mounted on the former Soviet republics to force them to make certain geopolitical choices. While the August armed conflict emphasized force, this time it is a question of who will be able to help the CIS out of the current economic plunge. And the benefactor will naturally want something in return.
    Alexander Lukashenko has mastered the art of maneuvering in the harshest environment. And now “father”, or batka, as they call him in Belarus, has new prospects.

    Lukashenko is desperately trying to avoid Russian economic serfdom. His range of possibilities has been shrinking ever since Vladimir Putin became president. Moscow has been indicating with increasing clarity that it had no intention of further paying for assurances of eternal friendship, but expected real rapprochement for its subsidies. Russia’s pressure was all the more effective for lack of alternative, because the West regarded Lukashenko as an outcast.

    But the situation has changed now. Europeans have worked out a different approach: why ask more of Belarus than of other CIS countries? Europe’s earlier bias against Lukashenko came from looking at Minsk in the context of Eastern Europe, with a hypothetical prospect of EU membership. However, if they treated Belarus as simply a part of the CIS – an alliance of Central Asian republics, Azerbaijan and Russia with which Europe is maintaining an active dialogue, they found that Belarus wasn’t much different. They decided they could defreeze relations, especially after Lukashenko made a couple of pro-Western statements.

    Admittedly, the Belarusian leader might find himself in debt to two creditors, Russia and the IMF, if he achieves the “balance” he wants. On the other hand, it is the only chance amid the current financial panic to obtain the funds while avoiding total dependency. And, as competition for influence on the former Soviet republics is still on, he might even hope for better loan conditions.

    As a power, whose capabilities far exceed those of its neighbors, Russia could take advantage of the current crisis to consolidate its grip on the region. Even more so because its rivals’ geopolitical competitiveness has decreased due to the world financial crisis.

    To this end, Moscow will need to carry out reforms in order to overcome its own problems. In addition, it should launch long-term economic programs, rather than address current issues. In other words, you cannot buy the recognition of Abkhazia and South Ossetia for loans. Moscow’s approach towards Minsk and its reaction to Belarus’ rapprochement with the West will show whether Russia is able to become the regional leader.

    Belarus Activist Turns Himself In, Is Arrested

    From: Javno
    A Belarussian opposition activist who had been on the run in neighbouring Poland has been arrested after turning himself into police, the Vesna-96 rights group said on Tuesday.

    Alexander Borozenko fled to Poland after being ordered to stand trial for taking part in protests by small entrepreneurs last January. He was taken into custody on Monday, Vesna said.

    Two participants in the protests were jailed and nine were put on probation. All have since been freed as part of President Alexander Lukashenko's efforts to improve ties with the West by releasing detainees seen as political prisoners.

    The European Union suspended a visa ban on Lukashenko this month in response to the releases, though some punitive measures remain in place after a parliamentary election that Western monitors said fell short of acceptable standards.

    "What is of particular concern is that the arrest took place against the background of EU concessions to Belarussian authorities," Vesna said. "One of those concessions to proceed with dialogue was the absence of political prisoners."

    Belarussian authorities were unavailable for comment on Borozenko's detention.

  • From the Opposition...

    Brest customs officers confiscate 10 issues of “Arche” magazine to conduct expertise

    From: Viasna
    Brest customs officers confiscated 10 issues of a Belarusian nongovernmental magazine “Arche” yesterday. They were meant for Polish authors of the edition and were supposed to be presented to Polish libraries. A customs officer Renata Nyadbayeva suspected that “the information printed in the magazine may harm the national interests of the Republic of Belarus”.

    “Nasha Niva” notes that issues of “Arche” have been confiscated at the border before. All of them were returned later. The recent confiscation is record. The thing is an issue of the magazine consists of 1082 pages and weighs about a kilo. Customs officers will send “the catch” to an expertise.

    “Borisovskiye Novosti” Facing a Defamation Case

    The «Borisovskiye Novosti» newspaper editorial has received a court claim from Viera Pratasievich, the local state-owned «Adzinstva» newspaper’s Editor-in-chief. (It should be mentioned that the periodical has been founded by Barysau District Executive Committee.)

    The editor is urging to get 10 million Br from a «Borisovskiye Novosti» journalist Ihar Lednik and 20 million Br from the «Bukas-media» Unitary Enterprise as moral damages for an article «Pre-election Concoction, or Another Lie», published in «Borisovskiye Novosti» before the Parliamentary election.
    The first court hearing will take place at 11 am on November 3, 2008.

    The «Borisovskiye Novosti» founder and Editor-in-chief Anatol Bukas explained to the BAJ Press Service that the critical article appeared in response to a defamatory publication in the «Adzinstva» newspaper under the title «A Scenario with Money Injections, Or the Purposes for Using Grants» by Viera Pratasievich.

    Sanctions against Lukashenka lifted, and political prisoners appeared in Belarus immediately

    From: Charter '97
    The human rights centre “Viasna” has made a statement in connection with the arrest of the activist of the civil campaign “European Belarus”, participant of the Process of Fourteen Alyaksandar Barazenka.

    On October 27 in Minsk a public activist Alyaksandr Barazenka was placed under arrest and placed to a remand prison. He is one of the accused in the Process of Fourteen, a criminal case initiated on charges relating Article 342 of the Criminal Code of Belarus against participants of a peaceful rally of market vendors held in Minsk on January 10, 2008.

    “The fact that the arrest of Alyaksandar Barazenka is taking place against the background of certain concessions of the European Union to the official Belarusian authorities: lifting of sanctions against high-ranking Belarusian authorities, renewal of official contacts of the EU countries with the official Minsk.

    It is worth mentioning that one of the main preconditions for this dialogue was and remains absence of political prisoners in the country and of politically motivated persecution of the regime’s opponents,” the Belarusian political prisoners state.

    Human rights centre “Viasna” reminds that freedom of peaceful meetings and freedom of expression of one’s opinion is the right guaranteed by the Constitution of the Republic of Belarus and international norms in the sphere of human rights.

    The human rights centre “Viasna” expresses protest in connection with the arrest of Alyaksandar Barazenka, finds his persecution politically motivated and demands from the authorities his immediate release.

  • Around the region...

    Russia's Medvedev shrugs off U.S. sanctions on arms

    From: Reuters
    U.S. sanctions on Russia's state arms exporter are short-sighted and will not have a significant impact on its sales, President Dmitry Medvedev said on Tuesday.

    The U.S. State Department last week imposed sanctions on firms in China and Russia for alleged sales of sensitive technology that could help Iran, North Korea and Syria develop weapons of mass destruction or missile systems.

    One of the firms on the list was Russian state arms exporter Rosoboronexport.

    "I consider such sanctions as short-sighted," Medvedev told a government commission overseeing Russia's arms trade.

    "It is unscrupulous competition, simply an attempt to close doors for the supplier and the main thing is that for us this decision can hardly be felt," he added.

    The United States has previously expressed concerns about Russia's plans to expand arms sales to U.S. foes Iran, Syria and Venezuela. Russian leaders say they only sell defensive weapons and complain that the global arms trade is overpoliticised.

    "We ... will sell arms and military equipment exclusively to maintain the defence potential of our partners," Medvedev said.

    He repeated Kremlin complaints that the West and some of its ex-Soviet allies like Ukraine were selling offensive weapons to Georgia, encouraging the Caucasus state to take on Moscow in armed conflict.

    Russia in August repelled Tbilisi's attempt to retake control of the breakaway region of South Ossetia and its forces went on to control parts of Georgian territory for a time.

    Defying the Western condemnation, Moscow has recognised South Ossetia and another breakaway Georgian province of Abkhazia as independent states.

    "Plans to re-arm this regime with additional weapons are under way," Medvedev said. "We will not forget this and will take this into account in our practical policies."

    Arms exports is one of a few sectors where Russian products are competitive worldwide. Medvedev said that a portfolio of Russian arms export contracts now exceeds $30 billion (19 billion pounds).

    "This is especially important now when a major financial crisis is unfolding," Medvedev said.

    Businessman convicted of Russian c.banker's murder

    From: Reuters
    A Russian businessman was found guilty on Tuesday of ordering the murder of a top Russian central banker who led a campaign against money-laundering and corruption.

    The state prosecutor said Alexei Frenkel had acted out of revenge when he ordered the killing of Andrei Kozlov, the 41-year-old deputy head of Russia's central bank who had revoked Frenkel's banks' licenses.

    Kozlov was shot dead in September 2006 as he left an amateur soccer match in Moscow.

    It was one of the highest-profile killings of then President Vladimir Putin's presidency, reviving memories of Russia's wild capitalism and contract killings of the 1990s.

    The jury found Frenkel guilty of ordering Kozlov's killing after deliberations of more than five hours at the Moscow City Court. Along with Frenkel, six others were convicted of charges related to the murder.

    Kozlov, in a crusade against money-laundering and corruption, revoked the licenses of dozens of banks, the court was told.

    "The motive for the crime was revenge," said state prosecutor Gulchekhra Ibragimova, adding that Frenkel had lost four of the banks he controlled due to Kozlov's tough actions.

    "Kozlov was an enemy of shady dealers like Frenkel," she told journalists outside the court. "I believe the verdict is just."

    Ibragimova said sentences would be pronounced at the end of this week.

    The jurors decided to ask the court to mitigate the sentences of two of the seven found guilty, because they had cooperated with the investigation and admitted their guilt.

    Defense lawyers said one of the two had bought the pistol with which Kozlov was killed, while the other was the driver of the killers' getaway car.

    Defense lawyers said they would appeal the jurors' decision.

    Frenkel, who strongly denied all accusations, had ordered a driver to pick him up at the court, apparently confident he would be acquitted, Russian media reported.

    Ukraine Gets an IMF Bailout

    From: BusinessWeek
    The IMF has agreed to lend Ukraine $16.5 billion, helping the country to avert a run on its banks and its currency, the hryvnia.

    The victims of the global financial crisis just seem to be getting bigger and bigger. First it was financial institutions, then came entire countries. After Iceland, the latest domino to wobble is Ukraine, which on Oct. 26 reached an agreement with the International Monetary Fund for a $16.5 billion bailout.

    Ukraine desperately needs the money to stave off a run on its banks and currency. With ordinary depositors rushing to withdraw their cash, one major Ukrainian bank has already been nationalized, while a second has been bailed out by the government. Meanwhile, the Ukrainian currency, the hryvnia, has fallen sharply. "People are still worrying about the currency, and continuing to convert their savings into U.S. dollars," Olena Bilan, an economist at Dragon Capital brokerage in Kiev.

    Ukraine is hardly the only country in Central and Eastern Europe feeling the financial heat. Just a day after the rescue package for Ukraine, Hungary's government also revealed that it is in negotiations with the IMF, expected to be concluded in the next few days. Belarus, a country once loath to have dealings with the West, has recently requested IMF help to replenish its depleted reserves. Even Russia, a country that enjoys massive foreign exchange reserves and a healthy trade surplus, now faces a full-scale financial crunch, forcing the government to provide hundreds of billions of dollars in emergency finance.

    Borrowed Billions from Banks
    And if oil-rich Russia has problems, then pity the poor Ukrainians, whose country is even more dependent on foreign loans to keep its economy humming. "They want the Western banks to start lending again," says Frank Gill, director of European sovereign ratings at Standard & Poor's (MHP) in London. "But the principal reason Western banks have stopped lending has nothing to do with Ukraine. This is a classic exogenous shock, exacerbated by highly leveraged banks with poor asset quality."

    During the good years, Ukraine's banks and companies had few qualms about taking out billions of dollars in short-term loans from international banks. Now much of that debt has to be repaid, but the global credit crunch means that there's simply no more money available to refinance loans. "Any company that needs to refinance a foreign loan essentially goes bankrupt," says Anders Aslund, senior fellow at the Institute for International Economics in Washington and an adviser to the Ukrainian government.

    Ukraine's foreign debt has risen from $54 billion at the start of 2007 to over $100 billion today. Overall bank lending grew by some 75% last year, as foreign banks rushed to set up in the country. The risks have been amplified by a common practice of extending hard-currency loans to local households and companies, whose debts will spiral dramatically if the Ukrainian currency continues its downward slide.

    Steel Slump Hurts
    That's now a distinct possibility. As if the credit crunch weren't bad enough, Ukraine also has been hit by a collapse in the price of its main export, steel. With global recession clouds looming, steel prices have fallen by half in the past four months, wiping 20% from the value of Ukrainian exports at a single stroke.

    Although the external shocks have been massive, Ukraine's problems have been exacerbated by poor domestic policies. Long before the recent turmoil in international financial markets, the country was showing plenty of worrying signs. Lax monetary and fiscal policies meant that inflation hit 30% in the month of May, and is on track to reach 25% for the year as a whole.

    Nor has it helped that the country is in a state of almost constant political turmoil caused by bitter infighting between the three main political parties, none of which seems able to work with the others for any length of time. Parliament was dissolved on Oct. 8, after the governing coalition collapsed. It means that Ukrainians are set to hold their third parliamentary election in as many years.

    Mills Facing Bankruptcy
    Perhaps one good thing to come out of the crisis is that Ukraine's bickering politicians may be forced to put aside their differences long enough to push through long-overdue reforms. A crisis law now before Parliament will include many desirable economic measures, such as a hike in gas prices and privatization of land. But any political truce will probably be short-lived at best.

    At least the IMF bailout, together with the government's $34 billion in foreign exchange reserves, means that Ukraine probably has enough money to pay the $50 billion in foreign debts that are falling due next year, staving off impending financial meltdown.

    But the measures are already too late to prevent the financial crunch from seriously affecting the real economy. Many of Ukraine's troubled steel mills face bankruptcy and are already laying off thousands of workers. Once-bustling construction sites in Kiev are now deserted, as financing for real estate projects has evaporated. Economists now predict that Ukraine's gross domestic product, which grew by 7% in the first nine months of 2008, is heading for a shuddering halt next year. "Ukraine is looking at 0% growth next year, or worse," says S&P's Gill.

    Rigid Exchange Policy
    That's a sobering lesson not just for Ukraine, but for many other countries, particularly in Central and Eastern Europe, now reeling from similar problems. High levels of international borrowing are inevitable when economies run high current account deficits—in other words importing more than they export, requiring foreign capital inflows to plug the gap (, 10/23/08). In Ukraine, that problem has been exacerbated by an over-rigid exchange rate policy, pegging the hryvnia to the U.S. dollar instead of allowing it to float.

    As a result, Ukraine was running a sizable current account deficit even before the collapse in steel prices blew a hole in its exports. "The lesson is that you have to watch your current account deficits: the same lesson that East Asian countries learned in the crisis of 1997-98," says Aslund.

    During recent years, countries in the region have more or less abandoned an old rule of thumb that external deficits shouldn't exceed 4%-5% of GDP. In the first half of 2008, Ukraine ran an external deficit of some 8% of GDP. But even that looks prudent compared with several countries in the region: Bulgaria, Estonia, Latvia, Lithuania, and Romania all have current account deficits over 15% of GDP.

    In other words, countries, just like companies and individuals, will have to earn money the hard way in the future, instead of living on the never-never. "If external credit shuts down, all of Eastern Europe is vulnerable," says Gill. "They have been addicted to low-cost credit for the last four to five years."

  • From the Polish Scandal Files...

    Poland's federation holds key election to tackle corruption

    From: AFP
    Under scrutiny from FIFA, UEFA and Polish authorities, Poland's corruption-riddled PZPN football federation is set to elect new leaders Thursday expected to red card graft as Poland gears up to co-host Euro-2012 with Ukraine.

    "Polish football is a mass of financial scandals, corruption and fraud", Poland's iconic 1970's goalie Jan Tomaszewski told AFP.

    He is among the strongest critics of the PZPN's current leadership, but he is by no means alone. The Polish media, politicians and fans also generally believe the Polish federation needs an overhaul.

    "The most popular slogan in Polish stadiums is 'Down with the PZPN'," Tomaszewski said.

    A row over how to clean-up the federation between the Polish government and world and Europe football authorities FIFA and UEFA came to a head in early October.

    Asked to do so by Poland's Sports Minister Miroslaw Drzewiecki, a Polish Olympic Committee arbitration tribunal installed an administrator to head the PZPN.

    Adamant to preserve the independence of national football federations, FIFA and UEFA immediately threatened to suspend Poland from 2010 World Cup qualifiers and even to review the decision for Poland to hold the Euro 2012 championships.

    Poland backed down and agreed to pull the administrator from the PZPN and for elections to flesh out a new leadership on October 30.

    A fresh round of legal action against senior PZPN officials came last week, with corruption charges pressed against Poland's former national team manager Janusz Wojcik and PZPN Secretary-General Zdzislaw Krecina, one of the four candidates standing in the body's Thursday leadership race.

    A total of 158 people -- including referees, players, club officials and PZPN members -- have now been snared in a vast football graft probe.

    Repeated match-fixing scandals have plagued all levels of the league for years.

    Polish tax authorities also seized 2.3 million euros in unpaid taxes from PZPN coffers this week.

    According to sports ministry officials, the corruption probe against the PZPN will last for "several months".

    Sports minister Miroslaw Drzewiecki said he wanted certainty that all senior PZPN leaders are in the clear and called on candidates in the election to make sure they "have nothing on their conscience".

    "If they do, it will be an embarrassment for them and for Polish football when the police and prosecutors will arrest PZPN senior officials," Drzewiecki warned.

    "The elections will be a turning point in Polish football," according to PZPN spokesperson Zbigniew Kozminski.

    "As a fan, I have my doubts," Poland's Interior Minister Grzegorz Schetyna said. Both he and football-mad liberal Prime Minister Donald Tusk are known to regularly play in matches.

    "Polish football is a social disease, like alcoholism. We can beat it, but we need to be calm and patient," says Michal Kleiber, president of the independent electoral committee called by FIFA, UEFA, the PZPN and the Polish government to supervise Thursday's election.

    Four candidates are in the running for the PZPN's presidency including two former Polish international players Grzegorz Lato and Zbigniew Boniek.

    It remains unclear to what extent the situation within PZPN may wreak havoc with Poland's Euro 2012 preparations.

    According to Minister Drzewiecki everything is proceeding according to plan.

    "At the current phase of preparations the main responsibility rests with the government. It's not the PZPN that is building stadiums, airports, hotels and other infrastructures for Euro-2012," he told AFP.

    Taxmen tackle Polish Football Federation

    From: The Times
    Tax authorities in Poland seized some 10 million zlotys (2.5 million euro, 3.2 million dollars) in unpaid taxes from Poland’s troubled PZPN football federation, a tax official here said Monday.

    "The official notification of the seizure (of outstanding taxes) was served today," Agnieszka Zukowska said.

    At issue are unpaid taxes from income the PZPN received in broadcast fees for the retransmission of football matches on television. Revenue authorities discovered the unpaid taxes on the sums during an audit lasting from 2006 to April 2008.

    "It is less than 10 million zlotys. The decision is legally binding," Zukowska told TVN24. According to Polish media reports, revenue authorties seized around nine million zlotys from PZPN coffers.

    The tax debacle comes just three days before the Polish federation is set to elect a new leadership and a week after senior PZPN officials suspected of corruption faced criminal charges.

    On Friday the world football authority FIFA confirmed the Polish federation’s leadership elections would go ahead on Thursday, October 30th, despite "civil and criminal investigations" against PZPN leaders.

    Polish prosecutors on Thursday charged Poland’s former national team manager Janusz Wojcik with 11 counts of corruption in a vast corruption probe of the PZPN involving 160 individuals including referees and clubs from various leagues.

    Prosecutors have also pressed charges against PZPN Secretary-General Zdzislaw Krecina, one of the four candidates standing in the body’s leadership race on October 30.

    Krecina is accused of having transferred 320,000 zlotys (88,800 euros, 116,500 dollars) to a club’s bank account in 2006 even though the money had been frozen by the tax authorities.

    Hooligans not victims…just hooligans

    From: Polskie Radio
    The regional court in Warsaw dismissed complaints by Legia fans regarding their arrests, reports Zycie Warszawy.

    The paper highlighted the fact that the police had the right to arrest the rowdy football fans. The courts have only made it through several of the two hundred hearings. The fans were arrested in the beginning of September before the football match with the second Warsaw team, Polonia.

    The Legia fans started rioting outside of the Polonia stadium and approximately 750 people were arrested. The paper writes that most of the arrested were just charged for hooliganism and disrupting the peace, while several dozen were charged with instigating the riot. Zycie Warszawy reports that several of the arrested have accused police of egging them on and then arresting them, and actually took these complaints to court. The courts, however, have thrown these complaints out, favouring the judgment of the police. (

    Former head of the “Supreme Chamber of Control” (NIK), Miroslaw Sekula, and government agent in charge of fighting corruption, Julia Pitera, are preparing a new statue for NIK, whose current mission is to promote economic efficiency and effectiveness in public service through audits.

    Nasz Dziennik writes that, in Sekula’s opinion, it is essential to provide some control over the appointment process of government employees. The proposed changes would give the director of NIK more power to make decisions. NIK is independent from the government yet fully subordinate to the Sejm, the lower house of parliament.

    Both Janusz Wojciechowski, another former head of NIK, and Jacek Jezierski, current head of NIK, feel that the proposed changes are unsafe and can seriously affect the body politic. The paper writes that the second issue is the proposed change in the mode of control. Currently, the auditing unit checks political protocols and can make sure that they are constitutional, Nasz Dziennik reports that Sekula would like to shorten and simplify the whole procedure.

    Rzeczpospolita writes that the Oncology Center in Bydgoszcz, in northern Poland, is ranked as the best public hospital in the country, according to the paper’s ranking in cooperation with the Center for the Monitoring of Quality in Health Care. The best public hospital for specialized care is the Centre for the Treatment of Burns in Siemianowice in the Slask region of southern Poland. The best private hospital is the Pleszew Medical Centre in central Poland. The paper ranked 256 hospitals in Poland. Sixty percent of the ranked hospitals improved their position and quality from previous rankings.

  • Sport...

    National Olympic committees of Belarus, Estonia ink cooperation agreement

    From: BelTA
    The national Olympic committees of Belarus and Estonia have signed a cooperation agreement, BelTA learnt from Consul General of Belarus in Tallinn Alexander Ostrovsky.

    The document was signed when Alexander Medved, three-time Olympic champion, Vice President of the National Olympic Committee (NOC) of Belarus, visited Tallinn as a distinguished guest at an international Greco-Roman wrestling tournament.

    The competition gathered almost 150 sportsmen from ten countries. It was dedicated to the 100th anniversary of Estonia’s most famous wrestler, two-time Olympic champion Kristjan Palusalu.

    The famous Belarusian wrestler made a greeting speech before the organisers and participants of the tournament and awarded the heavy weight winners.

    While in Tallinn Alexander Medved met with representatives of the Estonian NOC and the Federation of athletic wrestling.

    Belarus’ Anton Martsulevich wins bronze medal at World Juniour Judo Championships

    Belarusian Anton Martsulevich won a bronze medal in the -100kg weight category of the 14th World Juniour Judo Championships that took place in Thailand on October 24-26.

    The Belarusian team included three athletes. In the semi-finals Anton Martsulevich lost to Mongolia’s Temulen Battulga. In the bronze-medal fight the Belarusian defeated Katsuoki Terashima from Japan.

    Vitally Shevlik of Belarus placed 7th in the 73kg category. Denis Parkhomuk came in 9th in the 100+kg weight category.

    Athletes under 20 competed in 14 weight categories

  • Cultural scene...

    Концерт группы «Детидетей»

    1 ноября 2008 года
    в Центральном Доме офицеров

    пройдет сольный концерт группы «Детидетей».
    Шоу носит название «Субботник», в связи с чем афиши кричат с тумб «Явка обязательна».

    Группа представит на суд слушателям новые песни, написанные за период гастрольного отпуска, а также исполнит полюбившиеся хиты с альбомов «Конверты для снов» (2007) и «Отлично» (Westrecords, 2008).

    Музыканты группы «Детидетей» уже продумали концепцию выступления и, можно быть уверенными, зрителя ожидает неординарное театрально-музыкальное шоу. Оно вышло на новый идейно-творческий уровень, так как некоторые элементы старого шоу пришлось урезать.

    – Это первый наш большой сольный концерт после периода отпусков, – рассказала солистка «Детидетей» Анна Хитрик, – К его подготовке мы подошли ответственно. Уже продумали всю программу, надеемся, будет весело. Кроме нас, ответственно подошли к мероприятию и организаторы. Когда мы предоставили им список песен, которые будем играть, они попросили вычеркнуть нашу композицию «Девочка со спичками». Дело в том, что во время ее исполнения я цитирую одноименную сказку Ханса Христиана Андерсена и всю песню жгу одну большую спичку. Организаторы сказали, что с нашими выступлениями ознакомились службы пожарной безопасности и просят заменить спичку на фонарь. Я не уверена, что Ханс Христиан одобрил бы эту современную интерпретацию. После запрета на «огненное шоу» мы не стали рассказывать им свою идею жечь на концерте осенние листья… Мы просто споем все свои 70 песен! Шутка. Мы исполним композиции с альбомов «Конверты для снов» (2007) и «Отлично» (Westrecords, 2008). И, конечно же, новые песни, написанные за последние полгода. Их очень много, репетируем каждый день по 4 часа.

    Что именно приготовили своим поклонником «Дети…», они, конечно, не рассказали, но те, кто бывают на выступлениях группы, знают, что это всегда нечто вычурное и искренние, это игра чувствами, когда хочется то плакать, то смеяться, то просто восторженно хлопать в ладоши. Фан-клуб группы «Детидетей» намерен явиться на мероприятие с граблями и лопатами. В общем, концерт обещает быть ярким не только по музыкальному наполнению, но и по части театрального шоу, без которого не могут обойтись музыканты «Детидетей», театралы по образованию.

    Начало концерта в 19.00.
    Цена билетов – 12 000-35 000.
    Справки по телефонам: 760-79-92 (МТС), 692-70-99 (Velcom), 280-15-10.

  • Endnote...

    Window to Europe Opened Wider for Belarus

    From: Kommersant
    Yesterday representatives of the International Monetary Fund (IMF) and the Belarusian Government launched talks in Minsk about giving Belarus a $2 billion reserve loan. Minsk applied to the IMF after attempting in vain to get a loan from Russia and to seek gas prices reduction. With a lack of impetus in relations with Moscow, Belarus’ President Alexander Lukashenko decided to make friends with the West, which is glad to welcome him.
    Mission possible

    The IMF mission, headed by the Fund’s Resident Representative in the Russian Federation Neven Mates, arrived in Belarus on Sunday and yesterday conducted a series of negotiations with Belarusian officials. The IMF representatives are going to meet with Deputy Prime Minister Andrei Kobyakov, the National Bank’s leadership, as well as the Economic and Finance Ministers. The IMF experts are planning to stay in Belarus until November 6 – by that day they are to decide whether to give Minsk a $2 billion loan.

    Last week Kommersant reported that the National Bank announced it was going to apply to the IMF for a $2 billion loan, which Minsk plans to spend on replenishing its gold and currency reserves. The statement was made at the time when Minsk negotiated for a similar loan with Moscow. Money had been pledged to Alexander Lukashenko back on August 20, during his meeting with Russian President Dmitry Medvedev in Sochi. Minsk had been offered reduction in gas prices and a $2 billion loan in exchange for recognition of Abkhazia and South Ossetia. But Belarus has got neither so far. It need be added that the two Caucasian republics, whose leaders Sergei Bagapsh and Eduard Kokoyty applied to Mr Lukashenko for recognition, have received no answer as well.

    Under such circumstances, Belarus decided to appeal to western financial institutions, namely the IMF. However, prior to the current negotiations with the Fund, Alexander Lukashenko paid a visit to Moscow: last Saturday he held a three-hour meeting with Dmitry Medvedev. Official press releases about the talks’ outcome by the Russian and Belarusian leaders’ press services contained little relevant information and boiled down to the fact that “the Presidents discussed in detail various issues of bilateral relations”.

    Such wording is usually used when parties are unable to boast concrete results. Experts presume that Mr Lukashenko once again failed to get the cherished billions and reach agreement on Russian energy carrier prices. The latter was yesterday confirmed by Russian Ambassador in Minsk Alexander Surikov, who said that in the first quarter of 2009 Russian gas price for Belarus won’t be below $200 per thousand cubic meters. It need be noted that the Belarus Government had hoped for the present $127.9.

    Belarusian observers are sure that, against this background, Mr Lukashenko was prompted to demonstratively make friends with the West. Moreover, from experts’ viewpoint, Minsk is likely to get the funds it has applied for. “I was surprised to see Lukashenko turn to the IMF – he used to call them swindlers. But he might feel that it’s time to stock up state coffers with money,” Leonid Zaiko of the Belarusian think tank Strategy told Kommersant. “Appealing to the IMF sends the Kremlin a clear message – Belarus is now treated differently in the West. The game between Russia and the West where Belarus is at stake is cynical; it is based on the sticks and carrots policy. I am sure that the IMF will give the loan.”

    The wind of change

    Alexander Lukashenko seems to have mastered the art of maneuvering between Russia and the West. When hard times settled, he took advantage of the fact that the oil pipeline Druzhba and the gas pipeline Yamal-Europe cross his country. For example, in spring he openly threatened the European Union with transit sanctions in case Brussels followed the U.S. toughening its line on Minsk. However, since that time Belarus and the EU have demonstrated mutual understanding, at least in public. Especially after Mr Lukashenko’s consent to release several political prisoners, including his worst adversary Alexander Kozulin, ahead of the recent parliamentary elections.

    Since the elections, the relations between the EU and Belarus have resembled a bed of roses. For instance, despite the OSCE’s criticizing the Belarusian voting, the EU lifted a ban that denied a number of high-ranking Belarusian officials (including Mr Lukashenko) access to Europe. Last week Czech First Deputy Foreign Minister Tomas Pojar visited Minsk, where he promised that starting from January 1, 2009, Prague, which is going to hold the EU rotating presidency, will begin organizing the EU-Belarus summit. However, talks may be held earlier. According to the information of Kommersant, Belarusian diplomats are preparing their President’s visit to Brussels, which has been scheduled for late next month. Prior to it, Alexander Lukashenko may attend the Belarusian investment forum in London, which has been planned for mid-November.

    The rapprochement between Minsk and Brussels is fostered against the background of cooling in relations with Russia. In September Alexander Lukashenko complained that relations with the strategic ally are not duly developed. “Look, Saakashvili couldn’t have done anything worse than what he did to the U.S., himself and the world. But Americans haven’t let him down, after all. Rather, they supported him in the media, and with funds: they openly stated that they are going to give him a billion dollars. That is the way you should treat allies,” Mr Lukashenko briefed the Russian press.

    “Lukashenko’s policy suggests an ability not to fall between two stools. He keeps on receiving dividends from the East: investments in the energy sector, media support and recognition of elections as free and fair. Meanwhile he is showing Russia that if it doesn’t side with him, he will turn his back on Moscow,” President of the Minsk-based Mizes think tank Yaroslav Romanchuk told Kommersant. According to the expert, every move of Mr Lukashenko has “monetary” grounds. “Lukashenko’s latest visit to Moscow will allow him to state during the talks with the IMF that Russian gas price for Belarus will grow and that Minsk urgently needs money for reforms. On the other hand, reaching an agreement with the IMF, he will acquire an argument for bargaining with Russia, implying that he can find money wherever. The ideal variant for him is getting loans from both the East and the West,” Mr Romanchuk opines. He adds that the West might also benefit from it since it will be able to make Belarus more dependent on it.

    Nevertheless, Moscow has an effective leverage to make Alexander Lukashenko more compliant. And it is going to use it on November 1. The thing is, Rosselkhoznadzor, Russia’s agricultural watchdog, plans to impose a ban on exporting the production of 30 Belarusian farms to Russia. If the threat is fulfilled, Belarusian farmers will suffer from both the sanctions and the current economic crisis. “Russia accounts for 95% of Belarusian milk and 80% of meat export, respectively. There are farms throughout Belarus. A blow on them will be very painful,” Leonid Zaiko says. “After it, Lukashenko will have to articulate his stance: he will either seek reconciliation with Moscow or develop the closest relations with the West ever.”