Moscow bombings: Investors were not worried by the attacks on the Moscow metro. After two bombs killed at least 38 people on Monday morning, the rouble fell slightly — but then recovered. The stock market went up. Fair enough. Civil wars wreck economies but bomb attacks rarely have a lasting impact. Such violence is not even new in Moscow. Two attacks on the metro system in 2004 killed 50 people.
Nevertheless, the bombings at two busy stations in the heart of the city are worrying. Russia is far from unique in its vulnerability, but the record of its law enforcers does not inspire confidence. Previous attacks have not led to lasting security enhancements. Tellingly, Russian authorities suspect that a recent fatal attack on a Moscow to Saint Petersburg train was carried out by the same group, based in the volatile North Caucasus, which attacked the line in 2007.
Previous incidents in Russia showed how widespread corruption greatly eases the bombers' task, enabling them to smuggle explosives and evade surveillance. Not a single official was ever fired after the horrific siege of a primary school in Beslan in 2004, which exposed serious defects in Russia's security system.
More recently, a string of well-publicized cases of violence, corruption and incompetence by the police themselves have justly decimated public confidence in the force's professionalism. Dmitry Medvedev, the nation's president, has ordered a thorough overhaul, but it is far from certain that much will be accomplished.
Monday's bombings show the urgency of reform of the security system. But progress, if any, is going to be slow. While waiting, investors should reflect on the wider damage caused by Russia's general climate of lawlessness.