No. 1 fear in Lima: kidnapping. Crime wave hurts business confidence in indebted Peru

Julio Morales has never had it so good. Every month, his security equipment shop takes in six new orders for bullet-proof automobile armor at up to $18,000 a car. Mr. Morales says he's also selling ``a lot'' of pricey ``razor ribbon'' -- a wire barrier that keeps out burglars.

``Sales this year will very comfortably exceed $1 million, and my profits are exceptionally good,'' Morales says, leaning back in his swivel chair and smiling. ``Unfortunately.''

Unfortunately, because Morales owes his prosperity to a major crime wave that has badly shaken Lima's business community.

Longtime residents say that only a few years ago one could take a late-night stroll almost anywhere in this city of 6 million. Now, however, many security analysts say Lima is overtaking Bogot'a, Colombia, as the most dangerous capital in South America.

Businessmen say the security situation has begun to undermine the investor confidence which President Alan Garc'ia P'erez says is vital to his indebted economy's recovery.

``[Business] people are thinking of living abroad,'' says the president of a major local firm. ``The majority have already taken the first step and sent their kids overseas.''

Kidnapping is the No. 1 fear. There were 100 abductions recorded here in 1985, over 10 times as many as in 1984. The real number is probably even higher since most victims quietly pay ransom and don't report the crimes. One private security analyst says that the kidnapping rate during the last four months of 1985 hit ``two or three per day.''

Just last week, even as a private anticrime group was announcing a new $1,400 reward for information about wanted kidnappers, another victim joined the list of six others currently in kidnappers' hands. Alberto Falcon was seized by four men with machine guns outside his plastics factory in the rough-and-tumble Vitarte district.

``The kidnappers get more daring every day,'' says Interior Minister Abel Salinas. Even putting them behind bars doesn't guarantee they won't strike again. According to Mr. Salinas, one current kidnap suspect escaped from prison a week before the crime.

Ransom demands range from a few thousand dollars to $5 million. Authorities suspect that gangs find out how much money their victims have by infiltrating banks.

Dozens of homes have received letters or phone calls threatening to kidnap family members if they don't pay up. Five bodyguards, two of them former police, were recently arrested for making anonymous extortion calls to the family they were assigned to protect.

So far neither of Peru's guerrilla groups -- the Maoist-inspired Shining Path or the Tupac Amaru Revolutionary Movement -- has followed the example of other Latin rebels who financed their activities through kidnapping.

Yet many see a relationship between crime and guerrilla activity.

``The government has been forced to dedicate the police forces to controlling terrorism. Consequently they have abandoned their basic responsibility of fighting criminality,'' says one foreign company's security chief.

Ironically, authorities believe that the kidnapping began after banks took measures against a wave of bank robberies two years ago.

``The criminals discovered it was much easier to go after a defenseless individual than a bank,'' says a private security consultant. ``Rather than take a big risk to make maybe $5,000, they found they could very easily get $50,000. It was just a better business.''

Peru's Congress has increased the penalty for kidnapping from six to 25 years. The Interior Ministry has created a new antikidnapping police division. And police even managed to kill a leader of one notorious kidnap gang -- Hector ``Tito'' S'anchez Bed'on -- in a spectacular shootout on the Ecuadorean border.

For the most part, though, Peru's 80,000-man national police force -- poorly equipped and split into three rival branches -- has been no match for the kidnappers. Indeed, several former policemen are officially believed to belong to kidnap gangs. One kidnap victim says her captors told her not to reveal how much ransom her husband's company paid for her release, because police would then demand a share of the take.

President Garc'ia has fired over 1,000 officers he considered to be corrupt or superfluous, and announced plans to unify the rival branches. He has outfitted them with 200 new patrol cars and 10,000 AK-47 rifles freshly purchased from North Korea, and is paying a team of former Scotland Yard experts $500,000 to train a new ``SWAT'' team.

But those who can afford to still prefer to buy their own security. Companies have hired watchmen and bodyguards by the hundreds. Many have bought kidnap insurance, paying as much as $25,000 a year per $250,000 worth of coverage -- which includes the ransom payment itself plus the services of specialists to negotiate with kidnappers and deliver the cash.

Kidnap insurers and a host of other consultants have descended on the city in recent weeks to teach their clients to keep low profiles and make themselves unpredictable. Ostentatious Mercedes Benzes are out; beat-up Toyotas are in. Executives drive different routes to work each day to keep would-be kidnapers guessing.

Still, says one executive, ``We feel unprotected. When you have to walk around with a pistol and bodyguards you can't feel free. Even when one goes to the movies, one goes with a certain fear.''