Belarus Hunts Bombers as 12 Die in Minsk Subway Explosion

Belarus Map Including Portions of Neighboring Countries With ScaleApril 12 (Bloomberg) -- Belarus ordered a security crackdown after at least 12 people died in a subway bombing that the authorities classified as the first terrorist attack since President Aleksandr Lukashenko came to power in 1994.

Another 149 people were wounded after an explosive device went off during the evening rush hour at the capital Minsk's busiest metro station, which is near the presidential residence, the Belarusian security agency said today in a statement on its website. The agency still uses its Soviet-era name, the KGB.

Lukashenko ordered security tightened "to the uttermost" and said the blast may have been orchestrated from abroad, according to a transcript of an emergency government meeting published on the president's website late yesterday. Several arrests were made in connection with the explosion, the state- run Belta news reported.

The 56-year-old leader, whose government is under European Union sanctions, extended his 16-year rule in December elections that international observers condemned as undemocratic. The ex- Soviet nation has been the subject of speculation about a possible default amid dwindling foreign reserves.

"The explosion could divert the public's attention away from economic issues: the present currency crisis and certain, apparently unpopular measures being implemented by the state," Renaissance Capital analyst Anastasiya Golovach said in an e- mailed commentary today.

'Act of Terrorism'

The Prosecutor General's Office declared the blast "an act of terrorism" and began a criminal investigation, Belarusian state television said. Deputy Prosecutor General Andrei Shved said the authorities detained several people, though he didn't specify if the people were considered suspects in the bombing, according to Belta news.

Belarus's law-enforcement authorities today presented composite sketches of two suspects in the bombing, Russian state television channel Rossiya 24 reported. It cited unnamed experts as saying the bomb had been radio-controlled.

Lukashenko, a former Soviet collective farm boss whose regime was dubbed "Europe's last dictatorship" by the U.S. in 2006, said his country is facing a "very serious challenge."

The device went off as two trains were arriving at the Oktyabrskaya station, where the capital's two metro lines intersect, Interior Minister Anatoly Kuleshov told Lukashenko at their meeting. The bomb, which was equivalent to 5 kilograms (11 pounds) to 7 kilograms of TNT, left a crater 80 centimeters (31 inches) deep, he said.

Stability 'Under Attack'

"The event is shocking, not just as a terrorist attack but also because it happened in Minsk, Belarus, a place which has for a long time been considered highly stable in terms of security," VTB Capital analysts led by Alexei Moiseev in Moscow said by e-mail. "One of the key positive factors in Belarus, stability, has come under attack."

Belarus sovereign bonds fell, extending yesterday's declines. The yield on 2015 dollar bonds jumped 14 basis points, the most since March 28, to 11.017 percent as of 1:12 p.m. in Minsk. The yield on 2018 dollar notes was up 5 basis points at 11.106 percent, the highest since April 4.

Belarus, which lies wedged between EU member Poland and Russia, transports about a fifth of Russian gas shipments to Europe. It has been struggling to keep its public finances afloat in recent weeks after foreign reserves dwindled and ratings services downgraded the country's debt. The government is seeking a loan of $3 billion from Russia and other former Soviet partners.

Currency Devaluation

The central bank devalued the currency last month, allowing local lenders to sell foreign currency to companies at an exchange rate that deviates as much as 10 percent from the official rate, widening the spread from 2 percent.

While Lukashenko relaxed his hold on the country before the Dec. 19 election, his regime cracked down on demonstrators after the vote, arresting more than 700 people, including opposition candidates.

"Belarus does not face any obvious terrorist threats," Timothy Ash, the head of emerging-market research at the Royal Bank of Scotland Group Plc in London, said by e-mail. "Domestic political opposition to the Lukashenko regime has also been peaceful, and we doubt that they would want to escalate their opposition to the administration by resort to violence; arguably this would undermine the broad political support they have received in the West."

A bomb explosion in the capital during a concert attended by Lukashenko in July 2008 was classified by law-enforcement authorities as "hooliganism." About 40 people were injured in that incident.

'Exploding the Calm'

The two events may be linked, Lukashenko said last night, as he ordered the authorities to find those "seeking to benefit from exploding the calm and stability in the country."

The prosecutor general's office warned the media against publishing material aimed at "discrediting the Belarusian state and society."

Investigators from Russia's Federal Security Service, or FSB, the main successor to the KGB, arrived in Minsk to help their Belarusian counterparts in the investigation, according to Rossiya 24.

Russia has suffered a series of terrorist attacks in recent years. Twin suicide subway bombings during the morning rush hour in the Moscow subway killed 40 people a year ago. Doku Umarov, a rebel from Russia's mainly Muslim Chechnya region, claimed responsibility for the attack.

Article ©2011 BLOOMBERG L.P. ALL RIGHTS RESERVED; article first appeared at

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