09/21/2012 01:04 pm ET Updated Nov 21, 2012

Brazil's Crack Gangs Trigger New Favela Violence

According to a new study, president Dilma Rousseff 's $2.3 billion program to combat crack use has failed to stop Brazil from overtaking the United States as the world's largest market for the cheap, highly addictive street drug.

In the past, critical studies of Brazil's drug problem have been done by the UN, NGOs and U.S. drug enforcement organizations. What makes this finding stand out is that Brazil is taking a tough look at itself. The study was produced by the Federal University of Sao Paulo's National Institute of Science and Technology for Public Policy on Alcohol and Other Drugs. Brazil has over one million crack users, according to the new study.

Ten people have been killed so far this month in Rio's Chatuba favela and one military policeman was shot point blank in the face and killed by a teenage gunman who is crack gang-connected in nearby Rocinha favela, where a unit of 700 specially trained pacification police now occupy the area in an attempt to maintain law and order.

Trying to get a first mover advantage on the gangs, Rio de Janeiro state governor Sergio Cabral released a message on his Twitter account saying that the drug gangs, not the police in Rocinha are the attackers. The pacification police "are there to stay," governor Cabral says.

Pacification is an expensive and volatile proposition, not unlike conducting peacekeeping operations among rival factions in Haiti or Gaza, or political gangs in Mogadishu, Somalia or the big Kibera slums in Nairobi, Kenya. Over 270 million reals ($135 million) have been spent on health clinics, athletic faciliites and other urban improvements to the favela since the arrest of Rocinha's populist community leader and crack dealerr "Nem" in 2010. The population of Rocinha has been estimated to be around 100,000.

With crack gangs engaged in violent turf wars to control the street trade, pacification of the favelas and crackolandias is a daunting challenge for Brazil as it implements institutional security policies moving toward the FIFA 2014 World Cup and the Rio 2016 Olympic Games.

Because Brazil is a major consumer and an important transshipment point for the globalized cocaine industry to markets in Africa, Europe and the United States the political class has thrown money at the problem to exculpate themselves. But beyond the favelas and crackolandias just who controls the trade at the highest level is another matter. Top level Brazilian dealers are plugged in with Colombians, Mexicans and the Honduran and U.S.-based Mara Salvatrucha organization.

In an effort to bring military strategy to what has been viewed as a law enforcement problem defense minister Celso Amorim last month announced the launch of Operation Agata V, a multi-agency operation coordinated under his aegis designed to reduce crime and drug smuggling along borders with Bolivia, Argentina, Paraguay and Uruguay.

Amorim was responding in part to the concerns of Russian president Vladimir Putin, who, while claiming that the drug "mafia" reaps $500 billion in annual profits, called out Brazil as part of the global cocaine problem at G-20 talks in Mexico in June. Putin's friend Kremlin drug czar and former KGB general Viktor Ivanov, has visited Latin capitals twice this year to organize stronger drug enforcement coordination. The Dilma government recently worked quietly with Moscow and France to take down a major network that was shipping cocaine and crack to Russia and Ukraine. In another sign that the drug war in Latin America is taking on a more militarized dimension president Daniel Ortega of Nicaragua has provided Moscow with a base to train Latin armed forces and police in drug interdiction and other tactics.

Washington has taken a similar tack, seeking to control the profit pools of the cocaine trade by continuing to prosecute the war on drugs. The Obama administration, with some Bush retainers still influencing Latin policy, has become fast friends with Paraguay's new president Federico Franco resulting in base-sharing arrangements with the Paraguayan armed forces that will likely mission creep into an arrangement not unlike the U.S. military and consultant deal the Pentagon operates with the government of Colombia. U.S. military and Paraguayan units recently held joint riverine and other training exercises in regions of the Parana River where Brazilian forces have been conducting Operation Agata V.

Brazil, which provides thousands of peacekeeping troops to the United Nations, does not like to think it is involved in an American-style war on drugs. While the favelas become more violent, supporters of de facto decriminalization of drugs for personal use and some NGOs seek to institutionalize a model in Brazil that is in alignment with policies in Portugal, Uruguay and the Netherlands. Pragmatists in the armed forces and law enforcement lean toward tough laws and expensive social reeducation programs like those offered in Russia and Israel and expensive surveillance and tracking technologies. Both options stretch the fabric of constitutional democracy and carry a tremendous social and economic cost.

While new pacification units occupy Rio's favelas the city of Maceio in the poor northeastern region holds the nation's highest murder rate. With crack sold on credit in Maceio's Brejal favela users who don't pay up are often eliminated. Around 110 out of every 100,000 Maceio residents die annually from murder.

Ironically, Maceio is the capital of Alagoas state and the power base of former president Fernando Collor de Mello, who is now a Federal Senator. Collor, who was called "Mr. Clean" in the Brazilian press when elected in 1990, was impeached half way through his five year term in the wake of a major corruption scandal that revealed his habitual use of cocaine.

With favela gangs arming themselves with RPGs and recruiting kids who are used as child soldiers, cocaine's bad karma is making Brazil a more violent society and, like in the United States and Russia, too much money is involved to make the booming drug economy go away.