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Today's Headlines for:
Wednesday, January 14, 2009

Currency issues, IMF grants loan, Structural reform, New Business, Human ights, Russian Gas, Ukraine, Polish scandal, New, Sport and Culture

  • From the Top...
  • #377

    Alexander Lukashenko advises citizens not to change currency of their savings

    From: BelTA and the Office of the President
    There is no need for citizens to change the currency they keep their savings in, because nobody knows how the global financial crisis will unfold, President of Belarus Alexander Lukashenko told reporters, BelTA has learnt.

    “You need to live calmly as you did before. If you have savings in euros, US dollars or rubles, keep them that way. There is no need changing the currency. The situation is unpredictable today. If there was someone in the world who would say how bad the crisis was and how it would unfold… We have started zigzagging. There is no doing this,” the head of state said.

    Alexander Lukashenko said that those who keep their savings at home should not hesitate to bring them to the banks. Last year the banks paid $1 billion as deposit interest payments. This year the sum will be even bigger as the interest rates have increased, the President said.

    “As for devaluation, what harm can it do to a person? They say prices will hike. Yet there is a worldwide tendency towards falling prices today,” Alexander Lukashenko said. “We have put it straight why we have devalued the currency. This is not only about the IMF requirement. If we had not devalued the ruble we would have started incurring losses on the Russian market due to the difference in exchange rates,” he said. The National Bank was commissioned to ensure that the currency basket should fluctuate within plus/minus 5%. For the past three days the demand for the foreign currency has fallen 35% and this fall will continue. “Today we are facing the fact that we will have to strengthen the national currency, though it is not advisable from the point of view of the manufacturing industry,” the President said.

    Alexander Lukashenko rules out denomination in Belarus

    There will be no denomination in Belarus, President of Belarus Alexander Lukashenko told reporters on January 13, BelTA has learnt.

    “We are not going to carry out any denomination. If we take a decision to carry out denomination, we will announce it three or four months in advance,” the Head of State said. “Unlike devaluation you cannot carry out denomination at a time. You need to prepare the money,” Alexander Lukashenko said. He also reminded the reporters that for denomination a relevant document should be taken on the level of the head of state. “So far I do not have any draft documents on denomination,” the President said.

    Alexander Lukashenko also denied the rumours that the Russian ruble will be introduced in Belarus.

    No more sudden devaluation of Belarusian ruble

    There will not be another devaluation of the Belarusian national currency, Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Piotr Prokopovich told reporters after he had presented a report to President of Belarus Alexander Lukashenko on January 12, BelTA has learnt.

    “A one-off devaluation was carried out earlier this year. It signaled that there will not be another devaluation of the national currency. We have completely fulfilled our duty and there is no more need for a one-off devaluation,” he said.

    Piotr Prokopovich reminded that Belarus had actively negotiated a loan with the International Monetary Fund. In late 2008, the IMF preliminarily agreed to grant our country a $2.5 billion loan. A necessity to devaluate the Belarusian ruble emerged during the negotiations. The sides disagreed upon the way the devaluation should be carried out: should it be a one-off or a gradual devaluation. “Till the end of the last year we defended the point of view that the devaluation of the Belarusian ruble should be gradual, but later the National Bank decided to hold a one-off devaluation,” Piotr Prokopovich said. In the conditions of the global financial crisis and the economic crisis the country should be sensitive to any changes. In the previous years, the national currency rate had been stable; it did not change much over the last five years, so the people trusted us. But the crisis brought about some changes. The population watches the processes undergoing in other countries, and unfortunately, not always trusts what the National Bank announces. For example, last year, the National Bank maintained the currency rate within the level that was stipulated in the monetary policy of the country. At the end of 2008, the rate of the Belarusian ruble to the US dollar did not exceed Br2200 for $1. Despite all that, the people started to frantically purchase foreign currency. “In December we lost a lot of foreign currency because we sold it to the population,” Chairman of the Board of the National Bank of Belarus said.

    Therefore the country realized that in the conditions of the global crisis it should undertake the most efficient measures to encourage the economic development, export and production. A one-off devaluation is most effective from this viewpoint. A gradual devaluation is less efficient. As for some negative repercussions of a one-off devaluation, like higher prices for imported goods, that would happen anyway sooner or later.

    The National Bank and the IMF did not have any disagreements about the size of the devaluation (20%).

    A session of the Executive Board of the International Monetary Fund is to be held on January 12. This session is to take the final decision about granting a loan to Belarus. Our country may get the first tranche at the amount of $800 million as early as in January. “The agreements signed between Belarus and the IMF give us a green light to attract foreign investment in the country’s economy, to apply for loans to international finance organizations and the EU countries, which means that we will have an opportunity to work on the international finance market without restrictions. We did not have such an opportunity before,” Piotr Prokopovich said.

  • Other Belarusian News...

    MF Executive Board okays granting Belarus $2.5bn loan

    From: BelTA
    The Executive Board of the International Monetary Fund has approved the programme to grant Belarus a $2.5 billion loan, BelTA learnt from the IMF Office in Belarus.

    A reminder, on December 31, 2008, the IMF has preliminarily agreed to provide Belarus with a $2.5 billion loan and issued the relevant official statement by the IMF Managing Director responsible for this task.

    Belarus applied to this international finance organization for a loan in order to increase the national gold and foreign exchange reserves and to create a kind of “safety cushion” essential for the sustained economic development in the conditions of the global financial crisis. The agreement with the IMF is a key factor for the development of financial relations with the leading international organizations and the European Union.

    The measures undertaken by Belarus to decrease the impact of the negative external factors contributed to the positive decision of the fund. Apart from that, the National Bank of Belarus devaluated the national currency against the foreign currency by 20% as required by the IMF.

    National Bank of Belarus: Belarus to get first tranche of IMF loan in near future

    The first tranche of the loan of the International Monetary Fund (IMF) at the amount of $800 million will be transferred to Belarus in the near future, BelTA learnt from the information department of the National Bank of Belarus.

    On January 12, 2009, the Executive Board of the International Monetary Fund has approved a 15-month Stand-By Arrangement for $2.46 billion for Belarus.

    According to the information department of the National Bank of Belarus, the agreement between the Government of Belarus and the IMF has been reached owing to the measures taken by the Government and the National Bank to minimize the impact of negative external factors on the national economy. The agreement with the IMF is a key factor for the development of financial relations with the leading international organizations and the European Union.

    A reminder, on December 31, 2008, the IMF has preliminarily agreed to provide Belarus with a $2.5 billion loan and issued the relevant official statement by the IMF Managing Director responsible for this task. Belarus applied to this international finance organization for a loan in order to increase the national gold and foreign exchange reserves and to create a kind of “safety cushion” essential for the sustained economic development in the conditions of the global financial crisis.

    Planned structural reforms in Belarus to return economy to higher growth path by 2010-2011

    From: BelTA
    The measures already taken and announced by Belarus together with planned structural reforms in key areas should help return the economy to a higher growth path by 2010-11, said Takatoshi Kato, IMF Deputy Managing Director and Acting Chairman following the Executive Board discussion on Belarus, BelTA has learnt.

    “The International Monetary Fund (IMF) has approved a 15-month SDR 1.62 billion (about US$2.46 billion) Stand-By Arrangement for Belarus in support of the country's efforts to adjust to external shocks. The approval makes an amount equivalent to SDR 517.8 million (about US$787.9 million) available immediately”, the IMF press release says. The remainder will be phased thereafter, subject to quarterly reviews. The Stand-By Arrangement entails exceptional access to IMF resources, amounting to 418.8 percent of Belarus's quota.

    The main objectives of the IMF-supported program are to facilitate an orderly adjustment to external shocks and to address pressing vulnerabilities. To this end, the program contains strong macroeconomic adjustment measures and addresses a number of structural issues.

    "External vulnerabilities have been exposed by adverse terms of trade movements, falling demand from trading partners, and difficulties in securing external finance, leading to a decline in international reserves. In the face of these shocks and the adjustment needed to contain them, the economy is likely to slow in 2009”, Takatoshi Kato is quoted as saying.

    The Belarusian authorities have a clear strategy to address the challenges they face. “They have already adjusted the exchange rate and put in place tight fiscal and wage policies. The measures already taken and announced are strong and, with resolute implementation, will be sufficient to restore stability. Together with planned structural reforms in key areas, these measures should help return the economy to a higher growth path by 2010-11”, he said.

    According to the press release, the adjustment of the exchange rate parity will help restore competitiveness and address external imbalances. The adoption of the new currency basket and wider band will leave the economy better able to adapt to external shocks, thus making it less likely that further exchange rate adjustment will be needed.

    "Key measures include the planned reduction in directed lending, observance of the target of a balanced central government budget balance, and maintenance of a prudent wage policy in the broader public sector”, the press release says. “The authorities also plan to review the social safety net, in cooperation with the World Bank, to ensure that the most vulnerable groups are protected against the economic downturn and the effects of utility tariff increases”.

    Key structural reforms, including price and wage liberalization, should follow the realignment of the currency. Broader measures to support private sector development-including reductions in the size of government, deregulation, and privatization-are also needed to underpin better medium-term growth, and should be undertaken as fast as market conditions allow, the IMF said.

    Structural reform in the financial sector is an important priority in the program. The authorities have already enacted a blanket deposit guarantee, but the framework for financial sector liquidity and solvency support still needs to be refined.

    "The authorities have developed a strong macroeconomic program. Their actions merit the substantial financial support that the Fund will provide. The strength of the macroeconomic program gives confidence that Belarus will make a speedy return to stability. If the authorities follow through on their plans for reforms in key structural areas, prospects are also good for a resumption of rapid growth," Mr. Kato said.

    Belarus joined the IMF on July 10, 1992; its quota is SDR 386.4 million (about US$588.0 million). Its latest arrangement with the IMF was a Stand-By Arrangement that expired on September 11, 1996.

    Alexander Lukashenko urges to give more freedom to companies

    From: BelTA
    Alexander Lukashenko believes that today more freedom should be given to the companies in Belarus. The Head of State made such a statement while visiting the Belkommunmash Company on January 13, BelTA informs.

    “In this situation there is no need to put pressure on the Belarusian companies; they should be given more freedom. If needed, we should let the company to float freely. The present-day crisis must not bring more pressure on the companies. In this situation taxes should not be increased either. We understand that the companies need more room for maneuvers,” the President stressed.

    Alexander Lukashenko said that he had started talking about the necessity of liberalization more than a year before: today the state has a clear idea of all the elements of the activity of the society. We have developed our sovereign country with its own financial system. We are the masters of our country and, crisis or not, we needed to start eradicating the red tape. As a result, a directive on uprooting red tape was worked out to boost the liberalization of our economy”.

    The President confirmed that all the undertaken steps are “the calm continuation of the policy on building up a socially-oriented market economy in the present-day conditions”. Today there are new conditions, new requirements. Some ten years ago people would not have accepted it. The situation was different then, everything was corrupted, the country should have been taken under control. We have brought the production in order. The presidential elections gave green lights to the new phase in the development of the country,” the Head of State added.

    Alexander Lukashenko also pointed to the personnel appointments he had recently made: “We welcome young specialists as we are not likely to implement our plans without fresh ideas of the new generation”.

    Belarus to put major efforts into export development in 2009

    In 2009 150 actions outlined by six major avenues of the 2006-2010 National Export Development Programme will be carried out in Belarus, Foreign Minister of Belarus Sergei Martynov told a session of the Council of Ministers Presidium on January 13. The session was chaired by Prime Minister of Belarus Sergei Sidorsky.

    A plan of actions aimed at implementing the programme is adopted every year. The plan stems from proposals of ministries and agencies, oblast executive committees, public organisations. The plan provides for working out and implementing programmes for building up export in all the countries Belarus trades with. In 2009 the government will use the well-recommended practice of defining a list of exports and the volume for each country. Efforts will be exercised by intergovernmental commissions for trade and economic cooperation. The implementation of the plan of actions meant to establish the EurAsEC Customs Union is important.

    Sergei Martynov said, in 2009 for the first time overseas agencies have been assigned targeted volumes of the export of services. Only targeted volumes of the export of commodities were assigned before. The Economy Ministry has been charged with ensuring the fulfilment of the measures meant to build up the export of services.

    The second part of the plan provides for developing the export infrastructure: a Belarusian leasing company will be set up, the development of the overseas distribution network and the mechanism for financing export support, including support via Eximgarant of Belarus, will continue.

    Enhancement of the competitive ability of Belarusian exports is another avenue, which includes certification of products for compliance with requirements of international standards and European Union directives. The perfection of the legal base regulating foreign trade will continue. The efforts will include the preparation of draft treaties regarding economic cooperation by governments and agencies. Information coverage and awareness efforts include contests Brand of the Year, Best Exporter of the Year, exhibitions and expos.

    The progress in fulfilling the outlined plans will be regularly considered by the Interagency Council for Export Development chaired by First Vice Premier of Belarus Vladimir Semashko. Agendas of the forthcoming sessions have been planned already. The session will table the operation of assembly enterprises and joint ventures abroad, sales of agricultural machines overseas, training and retraining of foreign trade specialists, organisation of leasing.

  • Economics...

    No switchover to Russian ruble, NBRB vows

    From: BelTA
    Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Piotr Prokopovich has dispelled unconfirmed claims about Belarus’ switchover to using the Russian ruble in the near future. Early this year the situation was exploited by the people, who would like to destabilise it, Piotr Prokopovich told media on January 12 after meeting with President of Belarus Alexander Lukashenko. The meeting was dedicated to discussing results of the banking industry operation in 2008 and goals for 2009.

    The NBRB head said, major efforts had been put into spreading the gossip about a denomination allegedly in the works, about further one-time devaluation of the national currency against the US dollar, restrictions on bank deposit withdrawals, and Belarus’ switchover to using the Russian ruble within a week. Unfortunately, some Belarusians have been affected by the gossip but it is completely groundless.

    In order to carry out a denomination, a president decree has to be issued 3-4 months in advance, that is at least three months of preparations are needed. “This is why talks about a denomination in a couple of days are childish. Last time we started denomination on January 1, 2000 while the decree was signed back in September 1999. Everyone was calm and waited, knowing when and how the denomination will take place,” said Piotr Prokopovich.

    In his words, the transition to the Russian ruble would take at least 2-3 years. For instance, in order to start using the Russian ruble the central banks alone have to work out six agreements, some interstate agreements have to be adopted, some of them have to be ratified by the two parliaments. The procedure can take several years at best.

    As far as restrictions on deposits of individuals are concerned, the National Bank has never planned and does not plan such things. Experts believe at present the Belarusians possess from $2 billion to $20 billion in various currencies on their hands. “Why do people keep the money at home these days? It is a major loss of incomes for individuals. For instance, last year banks paid $1 billion in interest rates for deposits to individuals. While doubts about the stability of the banking system could exist before, nowadays they shouldn’t. Our banking system is strong and steady,” said Piotr Prokopovich. He reminded, the government has guaranteed the recovery of 100% of bank deposits in all currencies. Apart from that, the money should work for the benefit of the national economy.

    Legal capital of Belarusian banks doubled in 2008

    In 2008 the legal capital of Belarusian banks doubled to exceed Br4 trillion, Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Piotr Prokopovich informed President of Belarus Alexander Lukashenko on January 12. The press service of the President of Belarus told BelTA, the meeting touched upon results of the banking industry operation in 2008 and goals for 2009.

    The inflow of foreign investments into the banking system has soared, with bank resources 42% up on 2007.

    In late 2008 three banks with a share of foreign capital were set up in Belarus. The fact testifies to the trust foreign investors place in the Belarusian banking system.

    Last year’s economic success was also attributed to external borrowing and the use of the gold and foreign exchange reserves. 2008 saw the gold and foreign exchange reserves decrease by $1.33 billion. The money was used to ensure effective operation of the real economy sector and the achievement of the planned economic growth. This year Belarus should work hard to attract external resources for the sake of supporting the real economy sector and ending the global economic crisis with the least losses.

  • From the International Press...

    IMF approves 2.46 bln dlrs loan for Belarus

    From: AFP
    The International Monetary Fund gave final approval Monday to an emergency loan of 2.46 billion dollars to help Belarus cope with the global financial crisis.

    The IMF said the 15-month standby credit was approved by its executive board "in support of the country's efforts to adjust to external shocks" and will allow the eastern European nation to draw some 787.9 million dollars immediately.

    The remainder will be made available subject to quarterly reviews.

    "Belarus is experiencing serious economic problems," said Takatoshi Kato, IMF deputy managing director.

    "External vulnerabilities have been exposed by adverse terms of trade movements, falling demand from trading partners, and difficulties in securing external finance, leading to a decline in international reserves. In the face of these shocks and the adjustment needed to contain them, the economy is likely to slow in 2009."

    Officials in Minsk have said the IMF loan was needed to make up for lost export revenues because foreign countries were having trouble paying for its goods amid the global credit crunch.

    Belarus agreed to a 20 percent devaluation of its currency to "help restore competitiveness and address external imbalances," the IMF said.

    "The adoption of the new currency basket and wider band will leave the economy better able to adapt to external shocks, thus making it less likely that further exchange rate adjustment will be needed," an IMF statement said.

    The country will also make other reforms, including price and wage liberalization, the IMF said. It added that deregulation, and privatization "are also needed to underpin better medium-term growth, and should be undertaken as fast as market conditions allow."

    Juha Kahkonen, IMF mission chief for Belarus, said, "The IMF believes the Belarussians have implemented a strong economic program," adding that this includes "shifting to a more market-based financial system."

    The IMF loan is unusually large, representing about four times Belarus's quota, the maximum amount an IMF member country pays to finance the Washington-based institution.

    Normally an IMF member country can draw up to 100 percent annually of its quota, and 300 percent cumulatively. However, the IMF has granted exceptional access to financing to distressed countries, such as a loan to Georgia in September after its armed conflict with Russia.

    Belarus, a state on the European Union's eastern border with a Soviet-style economy, had initially requested a two-billion-dollar loan from the IMF but increased the request later, IMF officials said.

    Belarussian President Alexander Lukashenko last year threatened to pull out of the IMF if the lean had been rejected.

    The United States, by far the largest voting power in the 185-nation institution, has branded Belarus "Europe's last dictatorship." But US officials said last week relations had improved with Belarus.

    Ruble's Fall Sends Belarusians On Shopping Spree

    From: RFE/RL
    A sharp depreciation of the Belarusian ruble has resulted in long lines at Minsk currency-exchange booths and stores across the Belarusian capital.

    Fearing further devaluation, people are clamoring to purchase scarce U.S. dollars and unloading available rubles on all kinds of merchandise, lest prices rise precipitously.

    "I stood in line for two hours and there are just no dollars or euros to be bought," said one woman at an exchange outlet in the city center.

    Another man said he finally managed to purchase $600, but only after being turned away at three other exchange booths. "I got lucky. I think the national currency is going to continue to fall."

    Such is the prevailing mood among Minsk citizens, though the National Bank says the present hard-currency deficits are a temporary, technical problem, which will soon be resolved. The authorities say no further devaluation of the currency is planned.

    Still, many exchange outlets visited on January 11 by RFE/RL Belarus Service correspondents had posted notices saying: "No hard currency for sale."

    "Meanwhile, merchandise in local stores -- everything from fur coats to vacuum cleaners to refrigerators -- seems to be flying off the shelves as consumers race to spend their rubles before another unforeseen drop in the national currency or sudden price rise. Long lines were seen on January 11at cashier counters, display windows, and fitting rooms in Minsk's central department store.

    "People are buying literally anything and everything," a manager at one Minsk shop said. "We are breaking all sales quotas."

    "Our government should do things a bit differently," said one customer, referring to the National Bank's move on January 2 to allow the ruble to lose 20 percent of its value against the dollar. "Shock therapy is not for us."

    Official statisticians report 10-percent GDP growth in 2008

    From: Navany
    Belarus’ gross domestic product (GDP) increased by 10 percent to 128.8 trillion rubels in 2008, the National Statistics Committee’s press office said.

    The country’s industrial output rose by 10.8 percent to 127.5 trillion rubels, while the production of consumer goods increased by 12.1 percent to 25 trillion rubels. The production of foodstuffs rose by 13.1 percent to 12.6 trillion and of non-food goods by 11.6 percent to 10.8 trillion rubels.

    Agricultural production rose by 8.9 percent to 26.9 trillion rubels, according to the press office.

    Fixed capital expenditures soared by 23.1 percent to 35.9 trillion rubels. The amount of completed housing rose by 10.3 percent to 5,146,700 square meters.

    Retail trade jumped by 20.5 percent to 50.9 trillion rubels.

    Supreme Economic Court upholds decision to take away land plot, prayer house from New Life Church

    From: Navany
    A judge of the Supreme Economic Court of Belarus on January 13 upheld the Minsk city government's decision to take away a land plot and the prayer house on it from a Protestant community called New Life Church.

    The community will appeal the decision, its lawyer, Syarhey Lukanin, told BelaPAN. According to him, the judge promised to mail the rationale of her decision within five days. The community will then have 10 days to file an appeal.

    "I don't think that this decision was made by the judge," Mr. Lukanin commented. "The judge suspended the hearing for 18 months, citing a need to consult appropriate agencies, and now we can see the results of this consultation."

    In 2005, the city government decided to confiscate the land plot bought by the New Life Church in 2002 and what was then a cowshed and was later converted into a house of prayer. The authorities explained that the area where the plot is located was annexed into the city limits in 2004 and ordered the community to sell them the building for 37,581,476 rubels, or some $10 per square meter.

    After the Minsk City Economic Court upheld the confiscation order.

    Community members went on a hunger strike four days before the deadline for vacating the building in October 2006. They stopped the protest after the chairman of the Supreme Economic Court had contested all court rulings against the community and requested the Court’s board to consider the New Life Church case.

    The Court suspended hearing the lawsuit on April 22, 2007 because of the "need to consult appropriate agencies." It later decided to resume the proceedings, explaining that "the grounds for the suspension have disappeared." The first hearing after a break of more than 18 months was held on November 19, 2008.

    In September, the city authorities offered New Life Church a new land plot for the construction of a prayer house, which, however, was four times smaller.

  • From the Opposition...

    Freedom House: “No changes in Belarus”

    From: Charter '97
    Freedom House, a human rights watchdog organisation, has published the latest annual "Freedom in The World" report. And Belarus traditionally takes one of the last positions among 193 countries as "not free" country.

    For its rating the Freedom House annually analyzes the situation with political rights and civil liberties in different countries and divides the countries into three groups: free, partially free and not free.

    Belarus has been included into the group of not free countries together with such former Soviet Union countries as Azerbaijan, Kazakhstan, Russia, Tajikistan, Turkmenistan and Uzbekistan.

    Out of 192 countries of the world (excluding Kosovo and breakaway territories South Ossetia and Abkhazia not recognized by the world community), 42 states have been labeled not free, including China, Russia, most courtiers of the Muslim world and Africa. 89 countries have been recognized as free, and 62 as partially free.

    34% of the world population live in not free countries (more than a half of that live in China).

    Lukashenka: “If ship has got into a storm, it can overturn”

    From: Charter '97
    Visiting the enterprise “Belkamunmash”, Alyaksandr Lukashenka spoke about devaluation, denomination and privatisation.

    About denomination

    Alyaksandr Lukashenka stated that the leadership of the country does not have plans for denomination of the Belarusian ruble.

    “Today we are not going to carry out any denomination. No denomination could be held without the president. I do not have draft decrees about that,” A. Lukashenka said in an interview on Tuesday, Interfax informs.

    As said by him, “denomination, like devaluation, cannot be held in one day”. “3-4 months in advance a decree should be signed, and after that money are changed in a quiet and calm manner,” A. Lukashenka said. He added: “If we would intend to carry out denomination, we would announce in advance, 3 or 4 months earlier”.

    The Belarusian leader called “complete foolishness” the opinion that denomination would be held in Belarus with the objective to further transition to the Russian ruble. “Why should we exchange papers first, and then immediately change them for other papers,” the Belarusian president said.

    Returning to the topic of denomination, A. Lukashenka said: “We shall tell when it would happen, and we won’t make a mystery of that”.

    About privatisation

    Lukashenka has stated that the government does not have plans to adjust privatization programme, stating that enterprises won’t be sold for cheap in the conditions of the crisis.

    “We will not adjust privatization plans. But what a fool would sell when everything is collapsing, stock markets are collapsing. We will not sell the enterprises at the new low prices, but at the previous ones,” Alyaksandr Lukashenka said.

    “As long as prices for real assets and enterprises have dropped, what’s the use to sell them?” the Belarusian leader added.

    As said by him, “plans remain plans, but we shall sell at old prices”. “We won’t sell anything cheap,” he underlined.

    About entrepreneurs

    Alyaksandr Lukashenka believes that in present situation in Belarus enterprises should be given more freedom.

    “There should be no tightening of the screws” in the present situation. On the contrary, we should give more freedom,” he said.

    “Today or tomorrow I will sign a decree on declarative principle of business entities’ registration. One will come, give a statute, pay state duty, about 150-200 Euro, and go start your work,” Lukashenka said.

    On devaluation

    Lukashenka stated that this year no one-off devaluation of the national currency is planned.

    “The chairman of the National bank’s board of directors has been ordered clearly: plus minus 5% (changes of the ruble exchange rate to the basket of currencies - Interfax),” he stated.

    A. Lukashenka expressed doubt that devaluation of the ruble should become a topic for conversation. “This topic should not be discussed probably. When one talks a lot, it causes suspicion in many. But still it should be talked about, so that people won’t reproach you later,” he said. The response of the population of the country who started to buy goods after the devaluation.

    “Why should you buy 10 TV-sets, prices for goods will slump,” the leader of the state underlined. As said by him, “people should live quietly the way they lived before”. “If you have bank deposits in rubles, dollars or Euro, let them stay. It is very dangerous to convert deposits in one currency,” the president of the country believes.

    “The most important thing for people today is not to zig and zag. When it’s storming, people are not running from one board to the other, as the ship may overturn,” A. Lukashenka said.

    Lukashenka said that the Belarusian authorities “said honestly why the currency was devaluated. The reason is not even in the IMF (conditions for receiving a loan), but in manufacturers,” Lukashenka said. “The most important thing for me is to maintain manufacturing,” the leader of the state said.

    He noted that the National Bank “has footled away new year holiday season”. “They should have brought as much currency as needed. An artificial foreign currency deficit was created,” the president said.

    As said by him, “today there is enough foreign currency in the country”. “In February we will receive the second tranche of the loan from Russia, the IMF will give 1 billion (dollars), Venezuela has transferred half a billion dollars,” Lukashenka stated. Besides, he noted that “looking at the IMF, other creditors open gates for loans”.

  • Around the region...

    PGNiG says gas flow from Ukraine should resume Wed

    From: Reuters
    Poland's dominant gas distributor PGNiG (PGNI.WA) expects gas flow from Ukraine to resume on Wednesday, a week after a Russian-Ukrainian price row cut deliveries to Europe, its spokesman said on Tuesday.

    "We know from our unofficial sources that gas may flow tomorrow," Joanna Zakrzewska told Reuters. "We should know something more in a few hours."

    A Reuters journalist at a Russian gas pumping station near the Ukrainian border said on Tuesday Russian transit gas had already started flowing into Ukraine.

    PGNiG said earlier it had offset much of the shortfall in gas via Ukraine by increasing gas deliveries from a second pipeline crossing Belarus and also by tapping more extensively into Poland's domestic gas reserves.

    The company also took steps to limit deliveries to its largest industrial clients, including top Polish chemical makers as well as the country's top oil refiner PKN (PKNA.WA) to help shield private households and public services from disruption.

    Russia Ranks Low in World Freedom Report

    From: The Other Russia
    Personal freedoms are in short supply in Russia, according to a new report by US-based watchdog Freedom House. The annual “Freedom in the World” report, released January 12th, finds Russia near the bottom of 193 countries surveyed.

    To reach its conclusions, the organization researched metrics for political rights and civil liberties around the world, then ranking countries on a 7 point scale for each category, 1 representing most free and 7 representing least free (read the Freedom House methodology for the 2008 report).

    For 2009, Russia received 6 points for political rights and 5 for civil liberties, the same score it has held since 2005. Chechnya, which is classified as a disputed territory, received 7 for both categories.

    Russia is one of 42 countries classified as “not free.” Only 23 countries, including Belarus, Cameroon, Eritrea, Iran, China, Libya, Saudi Arabia, Turkmenistan, and Uzbekistan received scores indicating they were less free. Conversely, more than 150 countries ranked as more free than Russia, including Georgia, Ukraine, Kyrgyzstan, Estonia and Latvia.

    Youth activist Roman Dobrokhotov, who gained international prominence in December for heckling Russian President Dmitri Medvedev, was unsatisfied with the report:

    “Even thought the report came out in 2009, in essence it’s from last year,” he said. “It discusses the heinous Parliamentary elections and other events from 2007, but has no mention of presidential elections, the war in Georgia or changes to the Constitution.”

    “This will probably be reflected in the next report, and Russia will have all the opportunity to receive a 7 and 6, respectively,” he added. “For now we are objectively more free than Turkmenistan, North Korea, and Libya.”

    Ukraine gas crisis spurs EU energy policy

    From: Reuters
    The gas dispute between Russia and Ukraine that has left hundreds of thousands of Europeans shivering in the winter cold is bound to accelerate plodding European Union efforts to build a common energy policy.

    The cut-off of Russian gas supplies to Europe via Ukraine highlighted how little progress the 27-nation EU has made in connecting national energy networks and diversifying supplies since the first such crisis three years ago.

    “A similar situation occurred in 2006 and we Europeans now feel guilty about not having done what we said we would do,” said an EU energy official, who declined to be identified because of the sensitivity of his position.

    Unlike 2006, when the Europeans broadly sided with Ukraine’s pro-Western, democratic government, the EU has remained strictly neutral this time in what it regards as mostly a commercial dispute over gas pricing and unpaid bills.

    Both sides broke undertakings to Brussels on continuity of supply. The lack of transparency on contracts, the role of murky intermediaries and coalition feuding in Kiev all made it harder to sympathise with Ukraine this time, the EU official said.

    “The Russians were having a good gas war until they overreacted by cutting supplies to the EU. As in the war with Georgia last year, they could not resist the urge to teach former Soviet republics a lesson,” he said.

    Russian giant Gazprom’s demand for Ukraine to pay market prices is not unreasonable, but television images of Prime Minister Vladimir Putin ordering the company to turn off the taps to Europe belies talk of a purely commercial issue.

    Several EU states have increased gas stocks since 2006 and avoided major disruption. But Bulgaria, the poorest EU newcomer, and western Balkans states Croatia and Bosnia were caught with no stocks at all. Supplies to 18 countries have been affected.

    That prompted the EU to intervene. Czech Prime Minister Mirek Topolanek, the EU presidency holder, persuaded Moscow and Kiev to sign a deal allowing EU monitors to check the transit of gas across Ukraine to get supplies to Europe flowing again.


    Progress on integrating the European gas market by linking up national pipeline systems has been very slow, partly due to mutual mistrust among EU nations, as well as divergent business interests and political differences on relations with Moscow.

    Member states still do not share information with each other about the price their energy companies pay Gazprom for gas. The executive European Commission and the EU Council secretariat have been struggling to collate such data since 2006.

    “We preach transparency but we do not practice it among ourselves,” the EU energy official said.
    Poland has led a chorus of new members from central and eastern Europe calling for energy “solidarity” within the EU to reduce the former Soviet satellites’ dependency on Moscow, which provides a quarter of the EU’s gas.

    But Germany, Europe’s biggest gas consumer, opposes any emergency EU pooling arrangement for gas stocks, arguing that this is a commercial matter for utility companies.

    Berlin is keen to manage its energy relationship with Russia without the involvement of Brussels. It resisted any EU involvement in the Ukraine dispute until the leaders of Bulgaria and Croatia appealed personally to Chancellor Angela Merkel.

    EU officials say the crisis should spur European leaders at a March summit to put political momentum and public money behind plans to build cross-border energy interconnectors in Europe.

    They may also agree on minimum requirements for gas storage as the EU has for national oil stocks.
    And they will likely give higher priority to diversifying gas suppliers, supply routes and delivery mechanisms in particular to develop liquefied natural gas (LNG) facilities.

    Among suppliers, the EU is eyeing Qatar and Nigeria for LNG as well as Algeria, Norway, Azerbaijan, Iraq and Central Asian countries for piped gas.

    Russia is using the crisis to underline the cost for its NordStream and South Stream projects to carry Russian gas directly to European consumers via pipelines under the Baltic and Black seas, bypassing Ukraine, Belarus and Poland.

    The dispute will also add political weight to the Nabucco project, backed by both the EU and the United States, to pipe Caspian and Middle East gas to central Europe via Turkey, but there are doubts about finding enough gas to fill the pipeline.

    None of these projects offers an early solution, given the long lead times and high cost. EU officials say they are not an “either/or”. There will be enough demand and enough gas to justify all three extra pipelines, they say.

    In the shorter term, the capacity of existing pipelines can be expanded. But the main quick gains for European gas security would come from linking national networks into a single market and improving energy efficiency, especially in central Europe.

  • From the Polish Scandal Files...

    Polish paper says Orthodox leader was communist agent

    From: Kyiv Post
    A leading Polish newspaper said on Tuesday it had documentary evidence that the head of the country's small Orthodox Christian community collaborated with the secret services (SB) in communist times.

    An official of the Orthodox Church official acknowledged that its leader, Metropolitan Sawa, had cooperated with the authorities but said this did not amount to collaboration.

    The right-leaning Rzeczpospolita daily said the SB recruited Sawa in 1965 and that he provided numerous reports on priests, probably until the fall of communism in 1989.

    "From the archives the impression is created of a person who was trying to use the SB to shape the personnel policy of his church," said the paper, which has strongly backed efforts to unmask communist-era agents in Polish public life.

    Replying to the allegations, Sawa admitted to the paper that he had held many meetings with the SB but insisted that in his dealings with them he had only sought to protect his church.

    "The young generation may feel scandalised by this. But I say we had to agree compromises to save the Orthodox Church," said Sawa, now aged 70.

    "I signed no formal obligations ... We are aware that many priests met the SB ... Our attitude towards the (communist) authorities was shaped by the difficult situation of the Orthodox Church, and with some fear, so to say."

    Only about 500,000 Orthodox Christians live in Poland, a country of 38 million people. They mostly live in eastern regions, close to the border with Ukraine and Belarus.

    Atheistic communist authorities across the Soviet bloc persecuted churches and religious believers for decades.

    The allegations against Metropolitan Sawa are the latest in a long-running series of claims made about public figures, including some state officials and Roman Catholic clergy, suggesting they collaborated with Poland's communist regime.

    Poland's dominant Catholic Church is also credited with helping to undermine communist rule, especially under the moral leadership of Polish-born Pope John Paul II, extending support to pro-democracy activists in the Solidarity trade union.

    Contacted by Reuters, an official from the Polish Orthodox Church said: "In general Metropolitan Sawa is not denying cooperation (with the communist regime) but he claims this was not collaboration as it is understood today."

    The Orthodox Church in Poland is expected to issue an official statement later in the day.

    Rzeczpospolita supported a campaign by the previous Polish government of Jaroslaw Kaczynski to uncover people who spied for the communist regime and to exclude them from public life.

    PZPN head Grzegorz Lato to be replaced?

    From: Polish Soca
    New chief of the Polish Football Association (PZPN) Grzegorz Lato may have to be replaced just three months after his election.

    Stand down
    On January 16n January 16, a court in Szczecin, west-northern Poland, will rule whether Lato's election last October observed all the rules of the association’s statute. If the court finds against PZPN then Lato, a former Polish international, may have to stand down as chairman. The Polish government is also thought to be discontent with Lato’s performance so far, reports the Polska daily, accusing him of being weak on corruption, the issue which led to the resignation of the old board in the first place. On January 24, the Ministry of Sport will decide whether to call an extraordinary meeting of the special electoral board, to discuss the matter.
    Bad news
    On news of Lato’s election three months ago, government spokesmen declared that “this is bad news for Polish football”. It was well known that the legendary Polish footballer Zbigniew Boniek was the government’s preferred candidate. The decision would have to be consulted with FIFA and UEFA, who insist that all sports associations should be completely independent of national governments.

    Corruption involved
    Meanwhile more evidence is emerging that the Polish FA was aware of the widespread state of corruption for some time but failed to crack down on it. It has been revealed that PZPN were tipped off about match fixing taking place at the Korona Kielce football club a few years before any arrests were made, writes Witnesses say the club’s officials were also informed about the activities of one of the coaches later accused of match fixing but they failed to act.

    Hidden information
    And evidence given by Edyta Mierzwa, a wife of a former Korona Kielce player, discredits Polish FA as a whole. She says that PZPN had information about incidents of corruption at the club, but simply neglected to do anything about it. Numerous coaches - including Janusz W., who trained the Polish team to a silver medal at the 1992 Barcelona Olympics among them, - have been arrested alongside managers, players and officials at all levels of the game.

    ATM thieves steal from PKO BP clients

    From: Polskie Radio
    Up to 320 clients of PKO BP bank have had their bank accounts cleared by criminals who obtained their PINs and forged their credit cards.

    In a cash machine in Aleksandrow Kujawski, mid-northern Poland, thieves installed a special reader which helped them collect users' data. Then they produced cards duplicates, which they used to withdraw the cash in Bulgaria last weekend.

    According to some initial information, thieves could have stolen anything from a few hundred up to a few thousand zlotys. The criminals may have, however, withdrawn more money than the users had, making a debt on their accounts.

    The action was prepared very carefully, as the reader had been installed in October. It was also then when they gathered data from the citizens of Aleksandrow Kujawski.

    PKO BP has reassured that it will pay off damages to all those who have fallen victim to the robbers.

    The police warn against using a cash machine without checking whether additional, suspicious devices have been installed.

  • Sport...

    BATE Forward Gennady Bliznyuk signs half year contract with Germany's "Frankfurt"

    Borisov БАТЭ forward Gennady Bliznyuk has signed a halfyear contract with German club " Frankfurt " — the first place team of the second German Bundesleaga.

    Bliznyuk is in Turkey for four days, and has already put his signature on the contract agreement on January, 12th.

    G.Bliznyuk leaves БАТЭ as a free agent. His agreement with "Frankfurt" states that if a deal cannot be reached with the new club, the services of the football player will be gladly returned to Borisov.

    Several days ago another БАТЭ forward, Vitaly Rodionov, the best player of the national championship of 2008 went to "Freiburg", one of leaders of the second German Bundesleaga. The player for the Belarus combined team has signed with theGerman club a half year contract and will act in its structure as payment.

    Management of the БАТЭ squad insists that a mass sale of players is not takin place. According to head coach Victor Goncharenko, "as many as we send away, is how many new players can come in. We know about Rodionov, but as for the others, there are still some doubts."

    "Gomel" wins 6 straight in Belarus' open hockey championships

    In Belarusian "Extra League" play, Gomel won its sixth straight game over Latvia's "Riga-2000" by a score of 3:1. 37-year old Ukrainian forward Valentine Oletskogo scored twice and the Belarus command put up three times the amount of shots on goal – 53-18

    Minsk "Yunost", still in first place, won its third in a row against Novopolosk's "Chimika-SKA" 4-1. Novel Roman Romanenko and Artem Siankevich each had a goal and an assist.

    Bobruisk's "Shinik", taking advantage of it youth movement, won 4-1 against "Brest".

    Clovinski's "Metallurgist" fired bullets against outsider Latvian "Latgale" and won 2:1.

    In a duel of two Latvian teams Liapeiski "Metalurs" beat "АСК-Огре" - 3:2. The victorious goal was scored 35 seconds before the final siren by one of the best shooters of the open championship of Belarus Eddie Brachmanis.

    The tournaments leaderboard shows Minsk "Younost" in first place with 93 points (38 games) "Gomel" is in second with 83 (38), Chlobinski "Metallurgist" - 76 (38), Minsk "Keramin" - 68 (37), "Vitebsk" - 68 (37), Mogilyov "Chimvolokno" - 67 (38), Grodno "Neman" - 61 (38), Liapeiski "Metalurs" - 59 (37), Novapolotski " Chimika-SKA " - 54 (37), Bobruisk "Shinik" - 45 (33), "Riga-2000" - 42 (39), "ASK-Ogr" - 26 (38), "Brest" - 22 (36), Daugavpilski - 19 (38).

    Scoring leaders are Roman Romanenko of Minsk with 51 points(23+28). Oleg Timchenko a Ukrainian playing for Chimika has 48 points(21+27), Eddie Brachmanis 43 (27+16), Andrey Ignatovich of "ASK-Ogr" - 38 (20+18), Michael Klimin ("Gomel") - 38 (17+21) and Dmitry Rudak of Chimika 38 (13+25).
    Translation: Adam

  • Cultural scene...

    Review: `Defiance' a muted telling of great story

    From: AP
    If only "Defiance" were as spirited and feisty as the title suggests. And it held such promise, too.

    The real-life story of brothers who lead their fellow Jews into the forest of Belarus during summer 1941 to fight Nazis and form their own community offers a glimpse into a facet of the Holocaust we might not have known about before. Such a new angle is hard to find, especially recently, when there's been a slew of films with Holocaust themes including "Valkyrie," "The Reader" and "The Boy in the Striped Pajamas."

    But director Edward Zwick's movie never finds a way to grab you emotionally, despite typically strong performances from Daniel Craig and Liev Schreiber as two of the Bielski brothers, Tuvia and Zus. It's as if Zwick was more concerned with making sure we know the movie is about Something Important — which should be obvious based on the subject matter alone — rather than taking any narrative or aesthetic risks or delving into the complexity of the characters.

    Tuvia is the stoic leader and protector; younger brother Zus is the bloodthirsty rebel; Jamie Bell, as the youngest of the three, is caught somewhere in the middle. Women who've shown up from various villages and walks of life become their "forest wives," their primary function apparently being to fawn over them and then worry about them when they head off into potential danger. Naturally, Craig gets the most beautiful forest wife of all: the mysterious, blue-eyed Lilka (Alexa Davalos), with whom he shares a tastefully lighted tumble in a bundle of furs. (He is James Bond, after all.)

    But the Bielskis also get help, as their ranks grow, from refugees from all over who've heard about their hidden village and want to hide, forge a new life and, eventually, fight back — everyone from carpenters to intellectuals. The rare moments of comic relief come from their attempts to fool nearby villagers out of their food.

    Otherwise, there's something too muted, too respectful and, ultimately, too didactic about Zwick and Clayton Frohman's script, based on the book by Nechama Tec. It's a great story told in a remarkably unremarkable way.

    You're more likely to walk away feeling wowed by the romantic cinematography from veteran Eduardo Serra (who also shot Zwick's "Blood Diamond"), with its lush green meadows that give way to blinding whites as winter envelops the ever-growing encampment. Snow delicately falling on a makeshift huppah during a young couple's wedding is one moment that springs to mind.

    Beautiful as "Defiance" is, though, it almost makes you long for a documentary on the subject instead. You might actually get some meat and grit with your history lesson.

    "Defiance," a Paramount Vantage release, is rated R for violence and language. Running time: 137 minutes. Two stars out of four.

  • Endnote...

    More Belarusians Want Unification with Russia

    From: Angus Ried
    An increasing number of people in Belarus want their country to be integrated to Russia, according to a poll by the Independent Institute for Social, Economic and Political Studies (IISEPS). 46.3 per cent of respondents would vote in favour of unification with their neighbour if a referendum took place, up 12.5 points since September 2007.

    Conversely, 35.3 per cent of respondents would vote against unification.

    Belarus seceded from the Soviet Union in 1991. In 1994, independent candidate Aleksandr Lukashenko won the presidential election, boosted by his popularity after acting as chairman of an anti-corruption parliamentary committee. Lukashenko remains the country’s president to this day.

    In March 2006, Lukashenko won the presidential election with 82.6 per cent of the vote. The Organization for Security and Cooperation in Europe (OSCE) said the ballot "did not meet the required international standards for free and fair elections" and was "severely flawed due to arbitrary use of state power and restrictions to basic rights."

    Belarus held a legislative election in September 2008, The Central Election Committee said the opposition failed to elect one single representative to the legislature, declaring, "The 99 elected candidates support the current authorities. There is no opponent among them."

    In August 2008, Georgian and Russian soldiers engaged in combat in South Ossetia and Abkhazia, two breakaway regions in Georgia where many citizens hold Russian passports. The Russian government has formally acknowledged the independence of both regions. South Ossetia and Abkhazia are still considered a part of Georgia—a former Soviet republic—by the international community.

    On Dec. 23, Lukashenko said Belarus may recognize the independence of the two Georgian regions this year, declaring, "After the New Year, our parliament will consider these questions. (…) If the people and parliament have the will for this, then the president will sign the corresponding order."

    Polling Data

    If a referendum on Russia-Belarus unification took place today, how would you vote?

    Dec. 2008
    Sept. 2007

    For unification

    Against unification

    Wouldn’t vote

    Not sure

    Source: Independent Institute for Social, Economic and Political Studies (IISEPS)
    Methodology: Face-to-face interviews with 1,522 Belarusian adults, conducted from Dec. 2 to Dec. 12, 2008. No margin of error was provided.