2009 harvesting campaign, EU investment, ingenuity and integration, Russian aggression, Business, Banking, Opposition, Polish scandal and Sport...
Belarus President asks for speed and quality in 2009 harvesting campaign
|The President on a tour of the Brest Region|
“Speed and quality are the main things today. The yield of 35-40 centners per hectare will be unreachable if we are once again caught by those heavy rains we had not long ago,” the head of state stressed.
The President has pointed to the fact that today “the fate of the harvest is in the hands of the agricultural companies of the Vitebsk, Mogilev and Minsk oblasts”. “These regions should harvest the maximum they can in order to save this year’s yield,” Alexander Lukashenko said.
According to the President, strategic objective of this year’s harvesting campaign is to crop 85% of the fields. “As soon as we reach this figure, we can say that the harvest is saved,” Alexander Lukashenko stressed.
The Belarusian leader pointed to the significance of efficient processing of straw. “Do not burn or leave it in the fields as it is. Distribute it carefully and fertilize the soil. In that way the soil will be better prepared for spring sowing. This will help reduce spending,” the head of state said.
Alexander Lukashenko stressed the importance of harvesting grain, flax and potato in order in time to save them from late blight. According to the head of state, a large amount of hay prepared this year should be used to the maximum as well.
Revolution starting in Belarus’ pig breeding industry
A revolution is emerging in the Belarusian pig breeding industry, President of Belarus Alexander Lukashenko said during his working visit to the Lyakhovichi region (Brest oblast) on 7 August.
The head of state visited Beldan, a joint Belarus-Danish pig-breeding company. The first phase of the company – a breed farm (1,500 head) was launched in April 2009. The second phase - a feed farm (35,000 head) will be opened in October-December 2009. By 2011, the pig stock of the company will exceed 46,000 head per year. Apart from that, the company intends to construct a pig slaughter and meat processing unit, a feed factory and a garner.
The pig breeding company was built using cutting-edge construction technologies and engineering solutions that have never been employed in the country before.
The President said that Western investors suggested carrying out pig production projects in Belarus three years ago. A breed farm (25,000 head) was built in the Mogilev oblast using the Dutch technologies. The pig enterprise in the Lyakhovichi region was constructed to the Danish technologies. “Our pig enterprises are the most advanced ones. We have experience to share with other regions of the country. The Netherlands and Denmark are environmentally sound countries, possessing high technologies. We learnt how to construct new enterprises due to these pilot projects. The same way we will reorganize this field throughout the country,” the head of state noted.
According to European pig breeding companies that possess great experience working in the market of Western and Eastern Europe, Beldan pig enterprise is the best farm in Europe in terms of construction quality and technological equipment. Alexander Lukashenko noted that he was favourably impressed by the progress. He stressed that other pig farms in Belarus must follow suit. The head of state added that businessmen’s social responsibility should also be taken into consideration. “It is the essence of the development of rural areas and the agricultural industry. The pig enterprise Beldan meets these requirements”, he said.
Belarus’ agriculture will reach world standards, Alexander Lukashenko says
After visiting Beldan, a joint Belarus-Danish pig-breeding company, the President underlined that such companies should be built all over the country. The company employs state-of-the-art technologies and meets rigorous animal care requirements, including climate control, ventilation, heat-insulated floors, and dung cleaning systems. According to the head of state, today we have a good opportunity to adopt cutting-edge European technologies.
“Here is an example. We should calculate how many breeding farms we need in the regions; we should gradually reconstruct the old ones and set up new ones. We do not have to invent anything; we will just borrow the existing technologies. Today such technologies can be borrowed from Europe,” Alexander Lukashenko said. He added that one of the positive consequences of the global crisis is that it pushed Europeans to invest in new regions.
The President underlined that by 1 January 2010, the construction industry will totally comply with European standards, too.
Ordinance No. 10: Belarus takes another step to boost investment activities
The document defines the content of the investment contact. Investors or their organisations set up in Belarus are entitled to certain preferences as soon as the investment contract is signed and registered in the State List of Investment Contracts. In particular, the investors have a right to construct facilities spelled out in the investment project, develop necessary design estimates and hold their expert analysis at each stage of the construction.
The investors are exempted from a certain number of payments including import customs duties and VAT (apart from the VAT on the goods imported from Russia) on the equipment and component parts necessary for the implementation of the investment project.
At the same time the BSIA specialists believe the document provides quite complicated rules of getting customs duty and VAT breaks on the goods imported for investment projects. The document that confirms the possibility to use tax privileges is a list of goods imported by investors or their organisations for the implementation of their projects coordinated with an executive committee or a government agency commissioned for the coordination and signing of the investment contract.
The BSIA experts named several issues the document failed to regulate. According to the BSIA, the ordinance applies to a limited amount of the investment legal relationship. The Association also believes it is necessary to establish an additional mechanism of protecting the investors’ rights for property in Belarus.
Ordinance No 10 offers comprehensive investment guidelines
Ordinance No 10 introduces a multifaceted approach to the work with investors in Belarus, head of the main investment department of the Economy Ministry of Belarus Sergei Trofimovich told reporters commenting on the document on 7 August.
“Ordinance No 10 will expand treaty-making practices to attract foreign and Belarusian investors,” he said. He explained that until the Ordinance was adopted, investment contracts could be concluded only on behalf of the government or authorized agencies, while executive committees did not have the right to do that. Apart from that, a list of objects eligible for privileges and preferences was defined by the government. There were also other nuances that had to be treated on a case-by-case basis.
Ordinance No 10 is a comprehensive document which applies to both national and foreign investors. “This document will tell an investor which agreement he should conclude, at which level and what to do next,” Sergei Trofimovich said. The Ordinance introduces a three-level system for concluding investment contracts with the Republic of Belarus, depending on the significance of the project and the related preferences. An investment contract can be concluded through a resolution issued by the Council of Ministers of the Republic of Belarus with the approval of the President of the Republic of Belarus if the contract implies the provision of preferences to the investor which are stipulated neither in national legal acts nor in other legal documents issued by the Head of State; by the Council of Ministers if the contract implies the provision of privileges and preferences to the investor which are stipulated in national legal acts or other legal documents issued by the Head of State; by a national state administration body or other state organisation subordinate to the Government, by an oblast regional executive committee, or the Minsk City Executive Committee in cases when no preferences are required for the implementation of an investment project.
Foreign investors usually want to carry out design and construction works simultaneously, obtain land plots without any auctions and be exempt from various taxes. The government used to provide such opportunities, but on a case-by-case basis, by issuing a decree. The adoption of a comprehensive document will help to regulate this process. The Ordinance comes into effect in three months. By that moment the Economy Ministry of Belarus will draft the registration procedure of the investment contracts and other project documents.
This Ordinance sets the rules that make it easier to start investment projects in the Republic of Belarus and identifies investors’ responsibilities in this respect.
Contracts with investors should contain all the necessary information on investment projects, including the object of investment, the place, the amount of funding made available for it, the project deadline. The ordinance stipulates the mandatory conditions for the conclusion of investment contracts and provides for the opportunity to expand them depending on the specific nature of the industry and the investment project.
Taking into account the previous investment projects in Belarus, the Ordinance also stipulates general preferences for projects carried out as part of investment contracts.
Decree No413 to establish more flexible approach to work with investors
According to him, the work of the investment agents is an international practice. The same mechanism will be introduced in Belarus. A natural person or a legal entity skilled in the investment activity will be granted the right to represent the interests of Belarus in the work with a foreign investor. “There are many big businessmen who may agree implementation of projects with concrete investment institutions faster than other state bodies. I believe that the work of investment agents will help our governmental bodies and executive committees establish more flexible approach to attract investments,” Sergei Trofimovich said.
According to him, one of the German concerns has already proposed the Belarusian side to become its investment agent. The same proposal was made in Israel as well.
BelTA reported earlier, in line with decree No413 ‘On Providing Authority to Natural Persons and Legal Entities to Represent Interests of the Republic of Belarus in attracting Investment to the Republic of Belarus’, Belarus introduces a new institutional tool for carrying out investment activities, investment agents.
According to the document, an investment agent can be either a natural person or a legal entity, including a non-resident of the Republic of Belarus. The status of an investment agent can be granted to individuals skilled in preparation of investment projects and possessing the personal qualities enabling them to engage in negotiations with top management of big companies.
Any state administration body and any state-run organisation can submit a proposal for granting the status of an investment agent to a specific individual. Such a proposal can also come from any oblast executive committee (and the Minsk City Executive Committee) on the basis of an application submitted there by a potential investment agent.
The decision on giving the authority of an investment agent to represent interests of the Republic of Belarus will be taken by the Government.
Goods for low-interest consumer lending approved in Belarus
The list of goods which acquisition envisages concessional loans for the low-income segment of the population includes a wide range of products of national manufacture. Among them are household appliances: TV sets, DVD players made by the Horizont and Vityas Companies, vacuum cleaners and microwaves (Horizont, Midea-Horizont, Vityas), monitors (Integral and Horizont), refrigerators and freezers (Atlant), electric and gas cookers (the Brestgasapparat Company and the Brest Radio Engineering Works, Gomel-based Elektroapparatura). Concessional loans are also granted to acquire washing machines produced by Atlant, the Minsk Plant Termoplast, kitchen electric appliances by the Minsk Plant Termoplast, the Minsk Instrument Making Works, the Torgmash company in Baranovichi and the Ekran Company in Borisov. The list also embraces Belarusian boilers and electric water heaters.
Low-interest loans can be used to purchase carpets of the Vitebsk Carpets and the Carpets of Brest, Belarusian furniture and woodworkers.
Besides, low-income citizens are eligible for concessional loans to acquire mini tractors made at the Bobruisk Plant of Tractor Component Parts and Aggregates and the Smorgon Aggregate Plant, motor bikes and motorcycles (the Motovelo Company), trailers (Bobruiskagromash, Bobruiskselmash, Bobruisk-based Spetsavtotekhnika, the Smorgon Aggregate Plant, the Belarusian Autoworks).
In accordance with the decree “On concessional consumer lending”, low-interest loans will be issued by Belarusbank, Belagroprombank, Belinvestbank and Belpromstroibank for three years at the annual interest rate of 10 per cent for the acquisition of durable nonfoods.
Eligible for concessional consumer loans are the families whose average aggregate income per family member over the three months preceding the loan application date is lower than the average three-month per-capita minimum consumer budget of a four-member family (as of now, this figure amounts to Br1.163,8 million).
Belarusbank strengthens its positions in Top 1000 World Banks
The bank is up 175 positions as against 2008, because the Tier 1 Capital figure has increased and amounts to $1.160 billion. It proves the stable development and strengthening of the positions of Belarusbank in Belarus and abroad.
Volatility at the international financial markets has negatively affected the banking sector of the CIS, European and Asian countries. That is why the largest banks are loosing their positions in Top 1000 World Banks. According to the magazine, the leading banks of Russia have lost their high positions in Top 1000 World Banks: Gazprombank moved from the 112th to the 196th place, VTB Bank from the 60th to 70th, Sberbank of Russia from the 33th to the 38th.
Top 1000 World Banks includes other Belarusian banks such as Belagroprombank, Priorbank and Belpromstroibank.
At present Belarusbank comprises 97 branch offices, 47 banking services centres, and 1,835 offices (including 846 offices in urban areas, 989 ones in rural areas, of them 546 in agro-towns). In H1 2009 the bank opened seven new offices. The banking group Belarusbank includes eight unitary enterprises, one subsidiary enterprise and one affiliate.
Minsk companies attract about $3bn of foreign investments in H1
Minsk companies attracted more than $ 2.9 billion of foreign investments in H1. The direct investments made up 75% of the total volume, $42,100 were portfolio investments, and about one-fourth of the total amount were other investments, BelTA learned from the Minsk Central Statistics Bureau.
The most attractive areas for foreign investments include transportation (62.9% of the total volume of investments), general business activities (16.3%), commerce and public catering (11%), industry (3.3%) and communications (1.9%).
The companies of Minsk received investments from 58 countries. About 78% of them (more than $2.3 billion) came from the CIS. The investments from Russia accounted for 99.9% of the CIS investments.
The other anchor investors in the Minsk economy in H1 were Cyprus ($183.3 million or 6.2% of the total volume of investments), the United Kingdom ($172.5 million or 5.8%) and Austria ($156 million or 5.3%).
Lukashenka's Gambit in Relations with Moscow
|President Aleksandr Lukashenko with other CSTO leaders at Cholpon-Ata, Kyrgyzstan.|
Russia and Belarus have had serious differences since late 2002, and they were exacerbated in 2005-06 when the Russian company Gazprom expressed its wish to raise prices for exported gas to its neighbor to world levels. Lukashenka was outraged and made overtures to the E.U. that culminated in the country joining the Eastern Partnership in May of this year (EDM, May 18). The current dispute has a number of facets linked to gas prices, Russian loans, Moscow's desire to gain control over profitable Belarusian companies through their privatization, as well as Lukashenka's reluctance to recognize the independence of South Ossetia and Abkhazia.
In late May, when Russian Prime Minister Vladimir Putin visited Minsk, he offered Belarus a "stability loan" but with the proviso that it be paid in Russian rubles. When Minsk refused this offer (the IMF agreed to add an additional $1 billion to its earlier loan of $2.5 billion), Putin then expressed an interest in the privatization of Belarusian companies producing dairy products. At present, 95 percent of Belarusian milk exports are sold to Russia. Belarus' retort was to hold talks with the E.U. about meeting its standards for milk imports, once again a brusque rebuff to Russia (www.europeanvoice.com, June 24).
Consequently, Russia deployed the head of its trade and sanitary inspection authority (Rospotrebnadzor), Gennady Onishchenko to inspect Belarusian dairy products. Onishchenko is well known for his outrageous public statements and recently advised the Russian soccer team's fans to boycott the September 9 World Cup qualifier in Cardiff, Wales, because of the dangers of contracting swine flu (BBC News, August 4). However, no one in Wales thus far has died of the disease.
Onishchenko maintained that about 1,200 of the dairy products that Belarus exports to Russia did not meet various standards, including proper labeling, and banned their import, depriving Minsk of exports yielding $1 billion in annual revenue. Lukashenka reacted to that by failing to attend the CSTO meeting in Moscow in June, at which Belarus was due to assume the chairmanship (Russia had to serve as the "technical chair"). Moreover, he declared that in his absence, all decisions made, including those on the new CORF, were illegitimate. Russian president Dmitry Medvedev complained bitterly that Lukashenka had not even informed him about his prospective absence (Moscow Times, August 3).
Subsequently, Moscow ended the milk war promptly (Reuters, June 17) -thus indicating its irrational nature- but then raised the issue of gas prices and froze the final $500 million of an agreed $2 billion loan (Belorusskaya Delovaya Gazeta, July 31). According to the Russian side, Belarus could face bankruptcy as early as 2010 because of its lack of cash. Given this growing rift, the question arises as to why Lukashenka decided to attend the informal summit, having boycotted the official summit just a few weeks earlier.
The answer appears to be that Minsk cannot sever ties with Moscow completely because of its economic dependence in the energy sector, as well as its close military and security links, and its desperate need for current and future loans. Belarus has two bargaining chips left vis-à-vis the Russians: recognition of South Ossetia and Abkhazia and signing the CSTO agreement on the CORF. At Choplon Ata, Lukashenka declared that the Belarusian people must decide on these issues. Nor was there any one-on-one official meeting between Medvedev and Lukashenka (Komsomolskaya Pravda v Belorussii, August 4).
The presidents of the CSTO countries agreed to observe the active phase of the CORF exercises (seen by some observers as a Russian-led NATO), which will take place on October 14. According to Russian sources, all countries other than Uzbekistan (i.e. including Belarus) have agreed in principle to sign the agreement (RIA Novosti, July 31). This fall, Russian and Belarusian forces are scheduled to hold large-scale military exercise -Operation Zapad (West) (www.charter97.org, Aug 3), and an opportunity will thus arise for Medvedev and Lukashenka to meet.
However, once Belarus relents on the two issues, the authority of the president, as well as his country, will be weakened. South Ossetia and Abkhazia could conceivably apply to join the Russia-Belarus Union, rendering it less a partnership than a Russian-run body. Belarus has no strategic interest in the two Georgian republics and recognition would undermine the Eastern Partnership Project that also includes Georgia.
Moreover, if Belarus signs the CORF agreement and takes up its chairmanship of the CSTO, it is also approving implicitly at least, Moscow's leadership in a new military bloc. That might deal a serious blow to its new partnership with the E.U. Thus, Lukashenka's maneuvers represent a dangerous gambit, no matter how adroitly he has played the game to date.
Fitch Rates Belarusian Belvnesheconombank B
BVEB's IDRs and Support Rating are underpinned by potential support, in case of need, from its majority shareholder, Russia's Vnesheconombank (VEB, 'BBB'/ Negative Outlook). Fitch believes that should BVEB require support, VEB would be likely to have both the propensity and ability to provide it. However, Belarusian transfer and convertibility risks may constrain the extent to which BVEB would be able to utilise this support.
The Individual rating reflects BVEB's relatively small size, significant borrower and depositor concentrations, a high share of foreign currency loans, its deteriorating asset quality and the risks associated with aggressive growth plans in a challenging operating environment. The Individual rating also takes into account the bank's special role in financing Belarus's international trade, comfortable liquidity profile and reasonable capital ratios. Its capitalisation is supported by improving profitability and should benefit from further recapitalisation plans that are likely to significantly strengthen the bank's loss absorption capacity.
The Negative Outlook reflects the growing risk that Belarus's deteriorating economic environment and external finances could weaken the sovereign's credit profile and lead to an increase in transfer and convertibility risks. The Individual rating could come under downward pressure should asset quality deteriorate faster than expected, particularly if recapitalisation plans are not implemented. Any significant threat to Belarus's economic stability could also put pressure on BVEB's Individual rating by impacting its asset quality, the stability of its funding base and its liquidity profile.
The loan portfolio grew 43% in 2008 and 17% in H109, although H109 growth was almost fully attributable to the depreciation of the Belarusian rouble (BYR). Despite the deteriorating environment, the bank budgets a 53% loan growth for 2009 (even though it missed the 31% growth target for H109). Reported asset quality is good but is rapidly deteriorating - loans overdue for over 90 days amounted to 1.1% of gross loans at end-H109 (end-2008: 0.6%) and a further 2.1% of the loan book was rolled over on the same date (end-2008: 0.3%). The aggressive growth targets, high share of foreign currency lending (65% of the loan book at end-H109) and significant borrower concentration (the 20 largest borrowers accounted for 49% of corporate loans at end-H109) expose the bank to additional credit risks.
The 20 largest depositors accounted for a significant 33% of total deposits at end-H109 although concentration risk is somewhat mitigated by BVEB's comfortable liquidity position with liquid assets (defined as cash and equivalents, interbank placements and securities) amounting to 51% of customer funding at end-H109.
BVEB's regulatory tier 1 and total capital ratios stood at a reasonable 19.3% and 30.1%, respectively at end-H109 while significant improvement in profitability (H109 statutory net profit was 155% of 2008 profit) supports internal capital generation. Fitch estimates that at end-H109 BVEB could have raised its loan impairment reserves to approximately 26% of its gross loans from the current level of 2% before its capital adequacy would have fallen to the regulatory minimum level. A further increase of share capital by up to an equivalent of USD150m (about 92% of end-H109 equity) is planned for H209. VEB will also provide BVEB with long-term RUB-denominated subordinated debt equivalent to USD50m. After factoring in the budgeted loan portfolio growth of 53% for 2009 and these recapitalization plans, BVEB's maximum loss absorption capacity could increase up to about 46% of gross loans at end-2009, absent any significant BYR depreciation.
BVEB is 97.24%-owned by VEB and is a universal bank with a strong regional presence in Belarus and 2.5% share of the system's assets at end-H109. BVEB plays a special policy role in financing Russian imports and acts as an agent of the Belarusian government in attracting foreign investment into strategic infrastructure projects.
Belarus opposition: US should join EU programme
Washington should 'join efforts (with the EU) in the wisdom and effectiveness' of the EU's Eastern Partnership programme, wrote Belarusian opposition leaders Stanislav Shuskevich and Ivonka Survilla, in an open letter to US President Barack Obama.
The Eastern Partnership programme, begun by Brussels in May 2009, aims at a continent-wide common policy towards the EU's neighbours in the former Soviet Union.
EU diplomats have offered the former collective farm boss Lukashenko the possibility of increased trade with Europe, in exchange for Belarusian moves towards more democratic government.
Lukashenko in recent months reduced moderately state repression of independent media and opposition groups, while the EU lifted bans on travel by senior Belarusian officials to Europe.
An increased dialogue between the Lukashenko regime and the EU is in both sides interests, and works against 'economic blackmail by Moscow against Belarus, Moldova, and Ukraine with the goal of bringing them back under the control of the Kremlin,' Shushkevich and Survilla wrote in part.
Russia, since the break-up of the Soviet Union, has repeatedly slowed or cut off energy supplies to former Soviet republics critical of Moscow, while continuing to provide cheap oil and gas to former republics supporting Russian foreign policy.
Belarus until 2006 benefited from heavily-subsidised Russian energy shipments, until Lukashenko and Moscow in fell out over price hikes and a long-stalled plan to reunify the two countries.
Shushkevich, a top Soviet-era physicist, served as Belarus' first head of state until forced from power by Lukashenko in a 1994 constitutional coup.
Survilla, an ethnic Belarusian based in Canada, is the current president of the Belarusian National Republic (BNR), a government-in- exile opposing Lukashenko's rule.
Directive that would have banned trade intermediaries was authored by «creative statesman» by premier's order, Lukashenka says
By its directive numbered 991 and dated July 28, the Council of Ministers banned legal entities from buying domestic and foreign-made goods from companies other than manufacturers or their official dealers.
On August 4, the cabinet revoked the ban following the interference of the Belarusian leader.
"They have the recently issued Directive No. 991…and de facto banned economic entities from trading," the presidential press office quoted Mr. Lukashenka as saying. "Why, let the manager decide for himself what to do and then judge him by profits and profitability! Why should anyone be choosing his trade partners and telling him whether or not to work with intermediaries? We started an investigation and learned that the directive had been authored by a 'creative statesman' who wrote this document by order of the prime minister, threw it on his desk and went on vacation the following day. We actually have no one to bring to account!"
"Yes, reliance on intermediaries is bad and we should avoid it," Mr. Lukashenka said. "But what for? To have lower prices and good quality. Why did they whip the whole country into a frenzy? It's up to a business owner where and how to buy. He understands it's his money and he'll never buy something more expensive or of lower quality. That means that questions should be addressed to state enterprises. In such a case, let's set targets and check in a month and bring those responsible to account. That's all, no need for any noise. Otherwise questions arise: where is the economic liberalization we're talking about, where is the independence of the manager if we write to him what he should buy and where. Let him decide for himself and our task is to assess the manager in charge of manufacturing against legal and other criteria. That's how we should act instead of marching in a front around the country."
Zaika: Only mafia men who grab all they can lay their hands on to come to Belarus
From: Charter '97
On August 6 Alyaksandr Lukashenka signed a Decree No. 10 “On Creating Additional Conditions for Investment Activities in the Republic of Belarus”. The document defines the content of the investment contact. Investors or their organisations set up in Belarus are entitled to certain preferences.
It is stated that since now investors are no longer obliged to pass though a complex state examination of the investment project. The number of state agencies which can adopt a decision and conclude investment treaties is broadened.
Investors have a right to construct facilities spelled out in the investment project, develop necessary design estimates and hold their expert analysis at each stage of the construction. The investors are exempted from a certain number of payments including import customs duties and VAT on the equipment and component parts necessary for the implementation of the investment project.
In an interview to the website www.charter97.org a well-known economist, the head of the “Strategy” analytical centre Leanid Zaika stated that the Decree No. 10 was to be adopted 10 years ago.
“It would be a super -cool document in 1994. Then everybody would see that Belarus has a real desire to do something I the investment policy,” the expert believes. “The decree No. 10 could seem a record, a revelation, a victory for the Belarusian political establishment. As a matter of fact, it is a simple adaptation to regional markets which were working according to these rules long ago; it’s running on the spot. Speaking realistically, in H1 all the efforts of the government resulted in 5% of foreign investments. There is no use of waiting a huge flow of foreign investment after adoption of the decree. Today portfolio investment are focused on worldwide today, when capital is invested in purchase of valuable securities with the aim of their future resale. And the Belarusian government has made an emphasis on direct investments, in the industry”.
Leanid Zaika notes that adoption of the decree does not solve the problem of internal investments either.
“If this document is aimed at foreign investors only, our own investors are left on the sidelines. Who would refuse to buy machine tools without customs duties? Our businessmen would cry for joy!” the expert said. “It is certainly a step forward for the Belarusian establishment. It is a continuation of creating illusions about foreign investors. But the question is, will an investor have a wish to come here? Enter a Swiss bank – they have an interest rate a bit more than 1%. As a well-known British economist John Maynard Keynes said: “You can take the horse to the water, but you cannot make him drink”.
Leanid Zaika notes that the Decree No. 10 strengthens “the love of Belarusian authorities to foreign investors” and strengthens “the absence of desire to develop the country’s business”.
“Restructuring of the economy is beginning in the country, but we haven’t privatized our own property yet,” the economist notes. “Members of Colombian mafia, Georgian “genatsvales”, German Hanses those who like to grab all they can lay their hands on, are to come to Belarus. For 15 years the Belarusian establishment acted with the property like a dog in the manger, and they continued that until they brought discredit upon themselves. They have been sitting like this for 15 years and now they are dreaming of some radical changes and flows of investments”.
Ales Bialiatski: ‘The attitude to human rights activists hasn’t changed since the liquidation of ‘Viasna’ till registration denial to ‘Nasha Viasna’
- Mr. Ales, six years have passed since the liquidation of Human Rights Center Viasna. Has the attitude of the Belarusian authorities towards human rights activists changed for this time?
- The situation has not changed in any respect. During all this time the Belarusian authorities treated human rights defenders as a hostile grouping, which can be confirmed by many examples. We haven’t seen any human rights organizations obtain the registration in Belarus during this period, though there were enough attempts. Human Rights Center Viasna alone has made three attempts to get the state registration. At the same time, the state continues harassment of certain human rights defenders. They have launched campaigns on their discrediting and financial punishment – tax inspections and other control agencies studied their financial biographies. Administrative punishments are actively used against the human rights defenders who seek to monitor human rights abuses in Belarus. The last year also saw cases of criminal persecution. I mean the administrative cases that were brought against Yana Paliakova from Salihorsk and Leanid Svetsik from Vitsebsk.
Thus, the life of Belarusian human rights defenders still remains quite restless, and the state, pitifully enough, mainly treats the objective criticism nervously and reacts inadequately.
Meanwhile, I’d like to remind that in 1998 the UN General Assembly adopted the Declaration on Human Rights Defenders and the Republic of Belarus also participated in discussion of this document guaranteeing the right of persons, individually or in association with others, to criticize the authorities for human rights violations.
- Taking into account that recently Belarus has been clearly aspiring towards the European community and certain conclusions of the EU will be voiced in September, can we assume any improvement of the authorities’ attitude to human rights defenders and human rights organizations in Belarus?
- In fact, this aspiration towards the European community is quite specifuc. It cannot be considered as the sincere intention of full-scale cooperation that is clearly manifested in many countries with transitive regime. I can mention Serbia, Bosnia & Herzegovina, Croatia. First of all, these are Balkan counties that have a real close cooperation with the EU with the view of joining it. The latest example of this cooperation is the visa abolition for Serbia and Macedonia, as a result of which citizens of these countries can freely visit the EU countries. The Belarusian authorities have never had the aim to fully join the EU. At the same time, they would like to receive some economical benefits from such neighborhood by developing economical cooperation. It seems to me that everything hinges on the reluctance of the authorities to adequately react to the criticism of the socio-political situation and the grave human rights abuses that rest on the pseudo-legal legislative system that has been established by the Belarusian regime during the last 10-15 years.
Human rights defenders openly talk about this situation and want to inform Belarusian citizens that normal, mutually beneficial cooperation with the EU can take place only in the case of improvement of the human rights situation, the electoral process and other democratic reforms. Otherwise the European community will not cooperate with a country, whose authorities rig elections and unlawfully retain the power as a result. Neither will the EU completely trust a government that turns a blind eye towards or takes part in reprisals of political opponents. The same concerns the registration of NGOs. The position of the authorities remains clearly unchanged and a number of NGOs and political parties are simply deprived of the opportunity to realize their constitutional rights, obtain the state registration and act legally.
- Do you have any hopes for the last instance – the Supreme Court, that will start hearings on appeal against the non-registration by the Ministry of Justice of the civil human rights association Nasha Viasna?
- The Ministry of Justice has denied Nasha Viasna registration for the third time already during the last two years, and the man who is charged with representation of the ministry’s interests at court is Alexander Kharyton, who is famous for closing tens of NGOs. Besides the fact that these days Souhayr Belhassen, President of the International Federation for Human Rights, was denied Belarusian visa is quite alarming. In fact, I have the feeling that human rights defenders can be left without registration again. On the other hand, we have already stated that we stopped this senseless game with the authorities and it would be our last registration attempt. We will continue working without registration and let the authorities think how to solve this problem.
Year later, Russia's victory over Georgia cuts both ways
|Semia Kasradze listens to her television set -- the screen is broken -- in the Georgian village of Ergneti near the de-facto border with breakaway province South Ossetia.|
One year later, the euphoria has evaporated. The war is still discussed in tones of righteousness, but the military victory left Russia isolated, made formerly compliant neighbors reluctant to do Moscow's bidding, and sparked a foreign capital flight that dovetailed with the global financial crisis.
Most crushing, the war has done serious damage to what is plainly Russia's top foreign policy priority: the reestablishment of what the president has called a "privileged" sphere of influence in former Soviet states.
Today is the first anniversary of the war's outbreak, when an overwhelming wave of Russian tanks and warplanes crossed the border and roared to within 30 miles of the Georgian capital, Tbilisi. The exact circumstances of the war's onset remain in dispute, but the most commonly held version of events is that Georgia launched a military operation to reassert control over the rebel province of South Ossetia, and Russia invaded, fighting on the side of the separatists.
Threats and accusations of renewed fighting are flying thick and ominously this week, and there is concern that new battles could erupt.
Some analysts say Russia's postwar isolation is fueling instability. In Moscow, they say, there is a lingering discomfort over the war's failure to unseat Georgian President Mikheil Saakashvili, who is openly loathed by Russian leaders.
"Many in Moscow believe this is the result of indecisiveness, that we should have marched all the way to Tbilisi and finished the job," said Pavel Felgengauer, a Moscow-based military analyst with the Jamestown Foundation. "There's a strong opinion here that a serious mistake was made and that the answer is regime change. The situation is very dangerous."
In Georgia, the U.S.-backed leadership has been left to grapple with the painful reality of lost lands and shattered military infrastructure. Political instability intensified this year as massive demonstrations demanded Saakashvili's resignation, pointing to the war as evidence of his insufficiency.
But if Russia's plan was to show its might, to strike a crushing blow that would frighten former Soviet countries into greater compliance, it backfired. The sight of Russian tanks crossing into a neighboring country stirred dark memories of the Soviet past, and, analysts say, shifted the psychology in the region.
Instead of being intimidated into submission, the neighboring states have become defiant and have begun to buck Moscow. Resistance has been bolstered by the global financial crisis and tumbling oil prices, which abruptly dried up Moscow's cash flow.
Signs of Moscow's waning regional influence are coming at a furious pace.
In July, five leaders of neighboring countries -- nearly half the invited luminaries -- failed to show up at horse races hosted by Russian President Dmitry Medvedev at the Moscow hippodrome. The races are seen as an unofficial summit of the Commonwealth of Independent States, the regional confederation of post-Soviet countries. A year ago, many analysts agree, such a snub would have been unimaginable.
Kremlin efforts to create a "rapid reaction force" among former Soviet countries to counter North Atlantic Treaty Organization military strength have also met with surprisingly stiff opposition. Both Belarus and Uzbekistan have refused to sign the agreements needed to create the force. This week, Uzbekistan warned that a planned Russian base in neighboring Kyrgyzstan would destabilize Central Asia.
Armenia, once Russia's most stalwart ally in the Caucasus, has also been distancing itself. This summer, to the intense irritation of Moscow, Saakashvili was presented with Armenia's Medal of Honor during a visit to Yerevan, the Armenian capital.
Even impoverished Tajikistan is striving quietly for independence, preparing to ban the use of the Russian language in government offices and documents.
But nothing has so starkly crystallized Russia's isolation as the question of Abkhazia and South Ossetia, both breakaway republics inside Georgia's internationally recognized borders. Russia had been building ties with the two republics for years, including passing out Russian passports to residents and taking on payment of pensions.
After the war, Moscow quickly recognized them as independent states and dispatched heavy deployments of Russian troops to defend them -- presumably from Georgia's central government.
Yet not even Belarus, a country whose policy has closely twinned that of Russia, was willing to recognize the independence of South Ossetia and Abkhazia. In fact, only Nicaragua joined Russia in acknowledging their independence.
Since the war in Georgia, sparring between Moscow and Belarus has repeatedly erupted over trade and circumstances in Georgia. Analysts say the sight of Russia's invasion of a neighbor and onetime ally threw a chill over Belarus' relationship with Moscow.
"The Belarusian leadership does not want to see itself in Georgia's shoes," said Leonid Zlotnikov, an analyst with the Belarusian Market newspaper in Minsk, the Belarusian capital. Moscow's "idea of pressure by force does not appeal at all."
As regional resistance mounts, some analysts are beginning to question the conventional wisdom of Russia, as the government likes to put it, "rising from its knees" under its longtime leader, Prime Minister Vladimir Putin. With the pro-Western inclinations in Ukraine and Georgia, the moves by China to build better relations with Central Asian states, and recent ripples of political rebellion across the former Soviet Union, Russia's power is badly diminished, they say.
"We always say that in the 1990s Russia was weak and now it's strong, but actually, if you look at it, its sphere of influence and interests has shrunk dramatically," said Felgengauer, who gained prominence after predicting last summer's war. "Russian power is shrinking. It's huffing and puffing under Putin, but it's shrinking."
Sergei Markov, a ruling party lawmaker and political analyst seen as close to the Kremlin, agreed that Russia's regional standing had suffered because of the war in Georgia.
"It's true that Russian behavior during that period in August was, you know, I wouldn't say aggressive, I'd say maximum-style," Markov said. "I think what neighboring countries are afraid of is exactly this maximum style and unpredictability."
But he argued that any international loss had been offset by the cohesion of popular support within Russia.
The line from state media is that only Russia had the moral rectitude to step in to save the South Ossetians from the central Georgian government. Russian television viewers were fed a drastically exaggerated version of Georgia's assault on South Ossetia, and many Russians still believe the long-discounted Russian allegations that Moscow intervened to stop a "genocide" that killed thousands.
"Russia gained the consolidation of society and the confidence that the political leadership is ready to protect all Russian interests," Markov said. "And Russia got respect from the international community, which understands that Russia is ready to take risks."
Russia adds military muscle in Central Asia
|Russian jets train near Kant Air Base, Kyrgyzstan. The new base would be Russia's second in the Central Asian country.|
For the moment, at least, the United States, which also has vital military facilities in the area, has decided to remain a passive observer.
Moscow already maintains a military facility in northern Kyrgyzstan, only a few miles from an air base operated by the United States. The new one would be located farther south, near the Kyrgyz border with Uzbekistan. Formally, the base would be operated by the Collective Security Treaty Organization, a NATO-like, post-Soviet security organization made up of Armenia, Belarus, Kazakhstan, Tajikistan and Uzbekistan, as well as Russia and Kyrgyzstan.
At a meeting earlier this year, the group agreed to a Russian plan to create a Collective Rapid-Reaction Force, consisting of 20,000 soldiers drawn from member states with armored units and artillery. It is this new force that would have a presence in southern Kyrgyzstan.
Rumors that southern Kyrgyzstan was under consideration as one location for the CSTO troops started circulating last month after a meeting between Kyrgyzstan President Kurmanbek Bakiev and Russia’s deputy prime minister Igor Sechin and defense minister Anatoly Serdyukov.
Analysts in Kyrgyzstan offer various explanations for why Moscow might want a second military facility in the region.
One obvious explanation is continuing concern over the violence in Afghanistan, and the possible spillover of Islamic insurgency into Central Asia.
The Kyrgyz perception is that security needs to be bolstered on its southern periphery.
But the Uzbeks are wary of any external power taking up residence near their borders.
While the Uzbek government has not formally commented on the planned location of the base, an anonymous senior official in the capital told the government’s official news agency that “Tashkent categorically objects to new foreign military bases being established in neighboring states.” Mars Sariev, a political analyst in Kyrgyzstan, suspects Russia is merely trying to maintain the diplomatic upper hand in the region by announcing plans for the base near the Uzbek border.
“It’s creating an arena for talks with Uzbekistan,” said Sariev, who regards the entire controversy as a “diplomatic battle between Russia and Uzbekistan, with Kyrgyzstan merely used as the weapon of choice.” But observers in Tashkent take a more ominous point of view.
“As it tries to exert its influence, Russia is more liable to exacerbate problems by introducing a military dimension,” said Farhod Tolipov, a political analyst in the Uzbek capital.
For now, at least, the other major player in the region is attempting to steer clear of the dispute.
During a recent visit to Bishkek, U.S. Under Secretary of State for Political Affairs William Burns told a news conference that Washington had no intention of choosing sides in the fight.
“Any step that strengthens the sovereignty, independence and security of Kyrgyzstan is a sensible one,” he said.
That response might have been different had the United States not recently signed an agreement with Kyrgyz authorities to extend the use of an air base located outside Bishkek that is considered vital to America’s war effort in Afghanistan.
Is the Russian Patriarch being clever or too clever by half?
In the course of his 10-day visit to Ukraine, Kirill repeatedly stressed the commonality of the two Slavic peoples who descend from Kievan Rus’ and said that as a churchman with responsibilities for Russian Orthodox believers in both countries, he would willingly accept becoming a Ukrainian citizen while of course retaining his Russian citizenship.
Because such an arrangement would violate Ukrainian law and because his proposal suggested that the Moscow prelate was interested in the restoration of some kind of common state for Russians, Ukrainians and Belarusians, Kirill’s comments infuriated many Ukrainians and raised questions back home about his intentions.
On his return, Kirill was received by President Dmitry Medvedev. The patriarch told the president that his visit to Ukraine was “worth all the scandals” it had provoked not only about Ukrainian Orthodox leaders interested in autocephaly but also among Ukrainian officials who suspicious of the Russian churchman’s plans.
Kirill said that “the political tension between the two governments which has increased in recent times, has not been able to undercut the truth in Russia among ordinary Ukrainians.” And he said that Russians and Ukrainians must always “feel themselves comfortable in the common spiritual space” of which they are a part.
Medvedev responded that must be so even if they are “citizens of different states” because “despite everything else, they are sons and daughters of the Russian Orthodox Church.” And he insisted that these special “fraternal feelings … must be preserved regardless of who is in power and independent of the political requirements of any particular moment.”
But perhaps most important and certainly in the minds of some most ominously, the Russian president said that “the pastoral visit of the Patriarch [to Ukraine] can become the basis for ‘a number of practical conclusions,” although, as “Argumenty i fakty” reported in its coverage of this meeting, Medvedev did not explain what those might be.
Some Russians were enthusiastic about the Patriarch’s visit to Ukraine and even his proposal that he take Ukrainian citizenship while retaining his Russian citizenship. Sergey Chernyakhovsky, a member of the Moscow Academy of Political Science, was among them.
On the one hand, he said, Kirill and the Russian government are acting in Ukraine “on different levels,” something that works to the advantage of both. The patriarch “appealed to that Ukraine which is again a confrontation with Russia,” with which he did not have to speak as the Russian government does about gas supplies.
And on the other, Chernyakhovsky said, Kirill’s citizenship proposal could have an even greater set of consequences. “If all the citizens of the republics adopted the citizenship of the others and became citizens of 15 states, then,” the Moscow analyst suggested, “what would result would be the reunification of a new USSR.”
But if some Russians, especially those with imperialist aspirations, liked Kirill’s idea about dual citizenship, other Russians clearly are concerned about what the patriarch’s proposal says about his attitude toward the Russian nation. And one church analyst has warned that such people could turn against him and thus undermine the influence of the Church in Moscow.
In an interview posted on the Portal-Credo.ru site, Father Gleb Yakunin, a longtime liberal activist within Orthodoxy and the head of the Freedom of Conscience Committee, said that Kirill’s remarks about citizenship could represent.
It is obvious, Yakunin said, that by suggesting he is ready to take Ukrainian citizenship in order “to show that he so loves Ukraine and so sincerely wants to be accepted as a genuine Patriarch in Ukraine.” But in making this statement, which has already sparked opposition in Kyiv, Kirill has created problems for himself and his Church in the Russian Federation itself.
First, Russia’s “ultra-nationalists” are certainly infuriated by any suggestion that Kirill “loves Ukraine more than Russia” and who wants to make Kyiv rather than Moscow “the ‘Third Rome,’ a completely new idea which for them is completely unacceptable and against which they will speak out.
Second, Kirill has often spoken of the need to restore what he calls “’Orthodox civilization,’” and many are certain to view his proposal to become a citizen of Ukraine as a prelude to his becoming a citizen of Belarus and thus giving him a standing above all the Slavs greater than the Russian president or the Russian prime minister.
Such a move, Father Gleb said, could open the way for Kirill to act “in the style of Lukashenka” and thus to have the kind of independence that neither Medvedev nor Vladimir Putin would be happy about. After all, if they attempt to “take the Church under complete control” in Russia, Kirill is giving himself an out: he could simply move to Ukraine.
And third, there is another and even more dangerous consequence of the Patriarch’s proposal, Yakunin pointed out, one that Kirill himself probably has not considered. Perhaps a third of the Orthodox clergy in Russia are ethnically Ukrainian even though they current have Russian Federation citizenship.
If they decided to follow Kirill’s example and take Ukrainian citizenship, they too would have a way out should Moscow try to impose greater control over the Russian Orthodox Church: they too could leave. Consequently, Father Gleb concluded, “the situation is quite complicated with regard to games at dual citizenship.”
CBS arrest 60 year old with 300kg of marijuana
The oldest gangster was 60 years old, and was pretending to be a tourist.
The CBS officers had been following his vehicle for several hours, and stopped him when he finally arrived in Chorzów to unload the drugs.
At the same time another group of officers detained the head of the gang and three delivery men working for him. They also found 16kg of marijuana as well as other drugs in the warehouse. The criminals now face up to 10 years in jail.
Polish farm investigated over allegations of selling dog lard
Police and veterinary inspectors, tipped off by an animal charity, searched the outbuildings to find the rotting remains of dogs strewn across the floor and around 28 dogs which were kept in cages, some so overweight they were struggling to stand.
Another room contained machinery, an axe and bloodied clothes, along with a fridge containing bottles of lard.
“I don't even want to think about what happened here, It makes your hair stand on end,” a police scientist was quoted by Reuters as saying.
The jars containing the lard have now been sent away for tests, to confirm that they contents come from canines and not, as one of the suspects insists, pig fat.
Smalec is usually made from pig lard, but it is believed the owners of the farm had taken advantage of an old belief that the fat of dogs has special medicinal properties.
Renata Mizera, head of the “For Animals” Foundation, which was investigating the farm had heard of the practice in Poland. “We know of places in Poland where dogs are killed as part of a tradition going back generations,” she said. “Dog fat is thought to be good for lung diseases and other illnesses. It's also good business. A half-liter bottle can go for about zl.145.”
The surviving dogs have been taken away and are being cared for by the Foundation For Animals, until new homes are found for them.
Criminals turned informants report rampant corruption
The report includes the testimonies of two-thirds of the nearly 100 criminals who, in exchange for reduced penalties, have agreed to act as informants and testify against former partners in crime.
According to the report, 85% claim that the criminal group of which they were a member had a corrupt police officer working for them. A study from 2001 reported this figure at 96%. Moreover, one third of the criminals who participated in the research said that they have met a corrupt representative of higher authority, such as a Sejm deputy, Senator, Mayor or Minister.
Poll on corruption: Poles are corrupt!
The most corrupt areas appear to be politics, the health sector and justice (Ta Daaaa!). Despite the fact that most Poles believe that corruption is a serious problem, there is a strong drop by 24% in terms of those who believe that the crime should be severly punished.
Grazyna Kopinska from the Batory Foundation claims that moral assessment of bribery has not changed for years and polls which show a decreasing share of those admitting giving bribes is the result of penalties "[that are ] very fierce," said prof. Wlodzimierz Wróbel from Jagiellonian University.
Poles have negative opinions on the anti-corruption activities of the government headed by Julia Pitera, who is losing social trust, while the Central Anticorruption Bureau (CBA) is positively assessed by 41 percent of those polled.
Belarus 74th in FIFA World Ranking
The rating leaders are Brazil with 1642 points, Spain with 1590 and the Netherlands with 1379 points. All in all, FIFA has rated the teams from 207 countries this month.
The highest position of Belarus in FIFA/Coca Cola World Rating was 57th in June 2008. The lowest one was 146th in December 1992.
Belarus’ rivals in FIFA World Cup™ qualifying Group 6 are placed in the following order: England (7), Croatia (10), Ukraine (19), Kazakhstan (130), and Andorra (195).
The post-Soviet nations are ranked like this: Russia (6), Ukraine - 19, Latvia – 56, Lithuania – 59, Belarus-74, Uzbekistan – 79, Moldova – 87.
Belarus is 38th out of 53 European teams in UEFA Rankings.
Marina Novik sets Belarus’ new record in javelin throw
At the Mechislav Ovsyanik Memorial Marina Novik from the Minsk oblast threw the javelin at 63.25m which is Belarus’ new national record, BelTA learnt from Anastasia Marinia, the spokesperson for the Belarusian Athletics Federation.
Athletes from Qatar, Slovakia, Ukraine, Turkey and Belarus took part in the Mechislav Ovsyanik and Anatoly Yulin Memorials that were held in the Staiki sports centre on 1 August.
Belarus wins three gold medals at European junior weightlifting championship
Kazimir Fitsner of Belarus pressed the total of 327kg in the 77kg category to place first ahead of Poland’s Krzysztof Zwaric (319kg) and Russia’s Albert Sayakhov (318kg) at the European junior weightlifting championship in Landskrona, Sweden.
Yulia Novakovich took the title with the 227kg result in the 75kg category. The silver medal went to Russia’s Oksana Karpunenko (216kg) and bronze to Yulia Vlasenko from Ukraine (209kg). Belarusian Marina Shkermankova was victorious in the 69kg category by lifting the total of 217kg. She defeated Russian Maria Zubova due to the difference in body weight and Nina Schrott (195kg).
Belarusia Alexander Makarenko finished fourth in the 94kg category and Natalia Kolos in the 58kg.
In the spotlight: Lew Rywin
Rywin, who helped produce films such as Roman Polanski’s “The Pianist” and Steven Spielberg’s “Schindler’s List,” was at the center of one of biggest corruption scandals in recent Polish history when he tried to solicit a $17.5 (zl.55.49) million bribe from Gazeta Wyborcza-publisher Agora to influence a media bill in the firm’s favor. In 2004 Rywin was sentenced to two years in prison but after serving 43 days he was temporarily released on health grounds. He returned to jail after an appeal was dismissed and was finally paroled in November 2006.
The latest detention, which was executed at the request of the Appeal Prosecutor’s Office in Lódz, is the result of a two-year investigation into alleged illegal activities, including the falsification of medical documentation in order to obstruct legal proceedings in criminal cases. The Appeal Prosecutor’s Office has already brought a number of charges against the 10 detainees, although the details of these charges have not yet been revealed to the public. A court in Lódz last Wednesday decided to arrest Rywin and the nine other detainees for three months.
A representative of the Appeal Prosecutor’s Office in Lódz told journalists there would certainly be more detentions in the case. Approximately 100 people, including several top lawyers, are now thought to have been involved in a far-reaching scheme that involved, among other things, the payment of bribes worth around zl.700,000 and falsification of medical documentation. These are alleged to have helped well-known Polish gangsters avoid arrest and jail.
As WBJ went to press, Rywin’s exact role in the scandal was not yet known but a number of Polish media outlets had reported that in 2005 he may have tried to offer a zl.210,000 bribe to doctors in order to secure a delay or otherwise influence his prison sentence on grounds of poor health.