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The skies over Rio de Janeiro are packed with creatures and machines of all shapes and sizes. Huge gaviotas, the piratical frigatebirds with pterodactyl-like silhouettes, scan for smaller birds to assault and rob of their meals. Other species strike out here and there in noble V-formations, or swarm chaotically over patches of jungle. For Rio's humans, it's one of the ironies of life that the best picture-postcard views of the city belong to some of its poorest residents, the hillsides being the typical sites of the shantytown slums, the favelas. "Hill", here, is actually a byword for favela. But from the air, among the mountains, above the beaches and the glittering sea, the views are good too. And so people are airborne in any hang-glider or parachute they can get their hands on. Trembling propeller planes make their rounds, insecurely offering their advertisement banners to beachgoers as an alternative to the horizon. And there is always a helicopter overhead. The red ones shimmy about above the water, dropping rescuers and baskets, saving people from waves that feel as though they could drown you with just their after-froth. The blue helicopters belong to the world's deadliest police force. They can be seen sometimes in tight pairs, in low, doors open, carrying men with machine guns.

And now there is a new presence in these skies, circling somewhere high above the rest: an Israeli-made Heron reconnaissance drone, one of an initial three purchased last October as part of a drive to improve public security in the run-up to the World Cup in 2014 and the Olympics in 2016. "Only with a war weapon, such as a land-air missile or cannon, could the traffickers shoot down the aircraft," announced Alessandro Moretti of the Federal Police at the time. 

The focus on whether or not the traffickers would be able to down the new drone was dictated by what had taken place earlier that month: a Military Police helicopter had been shot down during a two-day war between drug gangs in the Morro dos Macacos favela. The Commando Vermelho ("Red Command"), the largest of Rio's three mafias, had invaded territory belonging to the Amigos dos Amigos ("Friends of Friends"). Several buses were torched and at least 15 people killed in the ensuing violence, including three of the policemen on board the helicopter. One person was arrested. Even though it was small arms fire that had brought down the helicopter, Moretti's claim was hubristic: "war weapons" are exactly what the traffickers have, and escalation is the order of the day. Many favela residents will tell you that they've seen missile launchers and bazookas in the hands of the gangs, and in the police operations that followed from this very war, two 30mm anti-aircraft guns were recovered, along with a handful of imitation police uniforms and other worrying items.


Rocinha, home to about 200,000 people and thought to be Latin America's largest slum (Getty Images) 

The first favelas appeared in Rio towards the end of the 19th century in the form of quilombos, settlements of escaped African slaves. These were augmented after the emancipation of slaves in 1888, and in 1897, 20,000 soldiers arrived in Rio, fresh from the War of Canudos, a bloody conflict between the government and a rebel colony of ex-slaves and other disenfranchised peoples in the north-eastern state of Bahia. The soldiers found that they had no option but to establish squatter settlements themselves. Through the middle of the 20th century, massive migrations from Brazil's rural interior continued to swell the favelas, and it is concisely indicative of the legitimate society's traditional attitude to these communities that no one now seems to know how many favelas there are in Rio. The 2000 census counted 513. There are usually estimated to be more than 1,000 now, housing about two million people — "more or less", mais ou menos in Portuguese, is an extremely common phrase here. It could be 1.5 million, it could be three million.

In the early 1980s, the drug traffickers began to fill the power vacuum created by the state's absence. For the vast majority of the residents of Rio's favelas, life has been lived since that time according to the strict rules of this one or two per cent minority of heavily armed criminals. The phenomenon has a Marxist heritage, as suggested by "Red Command", the name of the oldest gang from which the others were later spawned. But any political motivation fell away almost immediately. It is a strictly capitalist venture, selling cocaine and marijuana to the rest of Rio's inhabitants in a trade worth millions of US dollars a month. The bosses still like to think of themselves as Robin Hood figures, and they provide some basic services, ad hoc assistance and occasional treats for the people they control. On a Sunday evening in Rocinha, home to some 200,000 people and thought to be Latin America's largest slum, I found the street blocked at intersections by bouncy castles and trampolines laid on by the Amigos dos Amigos. Children were queuing up, in orderly single-file but already bobbing up and down, oscillating with growing energy as they drew nearer to the frenzied play. 

In the past, the traffickers perhaps did more to help the residents and less to harm them. In Nova Hollanda, one of 17 favelas that make up the Complexo da Maré (combined population: 135,000), Ana Caroline, 24, tells me: "It used to be that the bandidos would hide their guns if an old lady walked past, or they wouldn't smoke weed in front of children. But now they don't care." Natalia, 16, confirms: "The new guys are trying to be cool in bad ways." Squatter settlements are monuments to, among other things, the instinctive ability of a group of human beings under a common hardship to adapt, survive and progress as one. Rocinha has received more state help than most favelas because of its sheer size and its prize location in Rio's bourgeois South Zone, but it would have become a fashionable neighbourhood under its own steam by now if it were not for the bandidos. Even in the most neglected favelas in the suburban flatlands, where residents are additionally crippled by the massive distances they have to travel to work, things improve year by year. What starts as cardboard gradually turns to wood, and eventually becomes brick. But the tendency of the criminal element is to move, over generations, in the other direction, towards what William Langeweische, writing in Vanity Fair in 2007 about the "First Command of the Capital" (Sao Paulo's conspiratorial prison mafia, in fact more powerful and terrifying than any of Rio's factions), dubbed the "feral zone" — a world of increasing violence and increasingly arbitrary demonstrations of its power.

Fernando (not his real name), 20, from Rocinha, explained to me the rules by which residents of the favelas live. You aren't allowed to rob, kill or threaten another resident. Murder is almost always a capital offence, but breaking the other rules might result first in a warning (optionally reinforced by light torture), and then death at the second offence (optionally reinforced by heavy torture). Punishments include being beaten with spiked bats, or being thrown into, and forced to drink from, the rudimentary sewage channels that run through many favelas. The residents risk this kind of treatment when they enter a favela other than the one in which they live. You are not allowed to rape, in the sense of sexually assault, another resident.

We're standing on a Rocinha street with Fernando's mother and three-year-old niece, the beautiful Maria Clara, who is perched on a windowsill, legs daintily crossed, eating an ice lolly. "Are you wearing a bikini under your dress?" she asks my friend, who confirms that she is. "Why? I never wear a bikini unless I'm going to the beach. I have a swimming pool too, but it's just for me." Across the street a skinny mulatto with bleached hair is cooling his heavily tattooed and heavily scarred torso under a hosepipe. Fernando and his mother warn us that he is an estrupador, "a guy who takes a woman by force". People complained to the traffickers, and he got kicked out of the favela a couple of months ago, but now he has reappeared. Later, Fernando tells me that he was killed that very day: "It was a miracle they even let him go in the first place, but they didn't give him a second chance. Near the top of the favela, there's a place where they bury or burn the bodies."

Statutory rape, on the other hand, is not just allowed but actively encouraged by the bandidos — sleeping with very young girls is central to their culture. One of Fernandos's neighbours is a pregnant 11-year-old. When her father went to complain to the dad-to-be, a 17-year-old bandido, he responded simply: "What do you want from me? It's not my fault she opened her legs for me." Fernando says the parents are partly to blame. Often barely out of childhood themselves, "they encourage their daughters to wear sexy clothes". Rio is a sexy city, and the favelas are the sharp end of it. And Ana Caroline and Natalia, the two girls I interviewed in Nova Hollanda, are untypical: often the young girls are the bandidos' biggest fans. It's as Patricia Melo describes it in Inferno, her brilliantly funny, visceral novel about the favelas: "At 13 or 14, the girls were already showing their asses and looking for trouble...And they were only interested in armed men. The bigger the weapon, the greater the guy's chances."

Every one of Fernando's five sisters has been "a big, big, disappointment" to him. One of them, 17, complained to their mother that the bandido who made her pregnant had absconded. Dona Maria remarked in an offhand way that he was probably getting drunk somewhere. When the bandido got wind of this he came into Dona Maria's house, drunk, with a pistol, and beat her — for "putting it about" that he was a drunk. (Fernando went to the traffickers for another service they provide, the settling of disputes and the sanctioning of fair fistfights. They said, "You're right, beat him up." So Fernando did.) Another sister had a non-criminal husband who they were all very fond of, but she cheated on him with a bandido. Maria Clara's mother now lives in the Cidade de Deus (City of God) favela. Her father is a well-known killer from Rocinha. He lives somewhere else now, but can be called upon by the Amigos dos Amigos if his services are needed. Whether Maria Clara can ever call on him is much less certain. Once, when Dona Maria was doing laundry, a hand grenade fell from his dirty clothes.

The most important rule in the favelas, though, the one that overrides all other concerns and is most viciously enforced, is this: you are not allowed to do anything that might be construed as threatening or in any way impinging upon the traffic of drugs. In some favelas, you cannot call an ambulance, and no garbage whatsoever can be collected, because the police might use those vehicles as Trojan horses. Beyond that, new rules can be declared at any time according to the whims of the boss. They might be something like these, again from Melo's Inferno: "Anybody who talks to a reporter dies. Anybody who talks to the cops dies. Anyone who does anything stupid after ten at night dies. The next one to die is the preacher."

Some bosses are better than others, but to those living in the favelas, all police are more or less the same. "They only come in here to kill," says Natalia. A Human Rights Watch report released last December reveals that the Rio police kill roughly three times as many people every year as do the combined police forces of the US, and more than twice as many as the combined police forces of South Africa. The kills-to-arrests and kills-to-police casualties ratios are also shockingly high. Civilian deaths, accidental or otherwise, and summary executions of bandidos, are routine. The prevailing notion in the police force, only now beginning to change, is that they are at war with the favelas. The standard tactic has been the ruinous one of invading the favela in force to kill or arrest the bosses, and then withdrawing completely. The strategic focus has been simply on scrambling to meet the escalating levels of firepower possessed by the traffickers. When the previous state administration came to power in 2003, the following statement of intent came not from some incarcerated drug kingpin, but from the Public Security Secretary, Anthony Garotinho: "Our movement is on the streets, and if there has to be armed conflict, there will be. If someone has to die as a result, let them die. We're going in hard."

The current state administration, however, under Governor Sérgio Cabral, sworn in at the beginning of 2007, has shown itself willing to adopt new ideas. "Cabral is very special," says José Junior, the executive director of the AfroReggae Cultural Group, one of the many NGOs that does excellent work in the favelas. "His family was always involved with urban questions, and he has already managed, with billions of reais, to improve conditions in many favelas, by investing in technology, establishing centres for emergencies and so on." Crucially, Cabral's party, the Party of the Democratic Movement of Brazil (PMDB), is allied with President Lula's Workers' Party ahead of the elections later this year. "For the first time in my life, there is genuine collaboration at state level with both the federal government and the private sector," says Junior. Policing strategy is also changing. In a New Yorker article in October, Jon Lee Anderson quoted City Councilor Alfredo Sirkis as describing the drug mafias as "a low-intensity, nonideological insurgency." What follows from this observation is a new scheme now being piloted in seven favelas in the city. The traffickers are eliminated by the usual aggressive means, but then a "Peacemaking Police Unit" (UPP) takes up a permanent presence in the community. More than 3,000 military policemen have been selected from the best young recruits, promised salary bonuses, and allocated to UPPs. José Mariano Beltrame, the current Public Security Secretary, estimates that 30 per cent of favela residents will be living under the protection of UPPs by the end of 2010. Combined with continuing investment and infrastructure building, and the continuing work of NGOs, this could be something approaching the "full-spectrum counterinsurgency" that the US military wants to implement in Afghanistan.

Most people I spoke to had heard good reports about UPPs in other favelas and were cautiously hopeful. Ana Caroline wants a UPP to come to Maré, which is one of the most dangerous favelas in Rio due to the presence there of all three mafias. They clash frequently at the borders of their territories, in an area of the complex known as "the Gaza Strip". "But only if it works, if it's not just cosmetics. Because what they show you on TV is one thing, and real life is another" she says. "In some ways, the history of Brazilian government is the history of putting make-up over a problem," explains Gabriela Pinheiro from Luta Pela Paz ("Fight For Peace"), an NGO that runs a boxing academy in Nova Hollanda and has an alumnus in Brazil's Olympic team. Fernando would like to see a UPP in Rocinha, but fears that because the favela is so enormous, any attempt to wrest it from the traffickers would result in a long and bloody war.

Even if the UPP scheme is more than just make-up, there are massive challenges ahead. When the police invade a favela, the top traffickers usually know about it ahead of time, and make themselves scarce along with the best weapons and the high-grade drugs. It's thought that as favelas are reclaimed and pressure is exerted on the drug trade, the bandidos will either start appearing on the streets in large numbers, carrying out robberies and attacks against the police force, or move to annex favela territories belonging to their rivals. In either case, the level of violence will go up. An element so far missing from the strategy is what General David Petraeus would call "reintegrating reconcilables". José Junior tells me: "A bandido doesn't cease to be a bandido just because the police are in his favela. The government must agree to some kind of amnesty, like the Colombian government did with the militias there."

Behind the finer points of any counter-bandido strategy is of course the question of whether the government can start providing basic services to hundreds of thousands of its poor. Rocinha strikes me, during my handful of visits, as in many ways a very happy place. Fernando certainly likes his life there very much. Even when I ask Natalia if she likes living in war-torn Maré she replies, "I like it. I love it — the way people help each other, support each other, and act as an integrated community. And the love." Natalia's single mother is in jail, and it is proof of this communal love and support that she and her six younger siblings are surviving from day to day. She is taking general studies classes at Luta Pela Paz, and dreams of going to university to study medicine — "But even as a surgeon, I will live here." However, there are other favelas in Rio where it would be impossible to ask people if they liked their life.

Pierre Yves, a Frenchman who settled in Rio 20 years ago and volunteers for an awareness-raising group called Rio de Paz ("River of Peace"), takes me to Mandela de Pedra, a favela of about 2,500 people that is part of the Complexo de Manguinhos (60,000 people). We enter Mandela de Pedra on foot, by a road off a dusty highway in Rio's North Zone. The turn-off is marked by graffiti that reads, in large letters, "CV. Who betrays, pays!!!!" The road runs along a blighted river, and the Commando Vermelho have erected a tall barrier to shield it from view from the opposite bank. On 28 October 2009, Rafael Rocha Ribeiro, a 15-year-old with no connection to the drugs trade, was killed here by policemen taking pot-shots from the far side. At the end of this long channel, two bandidos with holstered pistols sit at a desk, a kind of reception, watching who approaches and presumably selling drugs to anyone mad enough to come here for them. The favela is full of children, toddlers standing in dark doorways in their underwear, older kids clambering about on mountains of garbage. They're very excited to see a pair of gringos, and they follow us around, asking us to speak in our strange languages. One boy asks Pierre whether he, too, eats — "as if I am E.T." Deep puddles of contaminated water are everywhere. Even here the adults greet us with "Good day" and the ubiquitous Brazilian greeting, "All well?" In one home we're introduced to a severely disabled young girl who smiles prettily up at us as she spasms inadvertently on the floor. Pierre is the quintessential charity worker. He looks harrowed, totally shot, but he floats around inquiring after small details, friendly and pragmatic, seeing what little things can be done.

Later Pierre takes me to a prison, or to be precise, a polinter in Neves, on the East side of the Guanabara Bay. It isn't a state facility, but a local holding prison for men on remand. "I'm convinced," he tells me on the way there, "that the cycle of crime cannot be broken with the conditions of detention you are about to see. It is just made worse. The conditions are like the inside of a slave ship. And here, I will introduce you to a member of the Commando Vermelho."

The polinter is divided into two wings, each consisting of a corridor that joins four cells of about 15 by 30 feet in size. The Commando Vermelho, and other men who just happen to live in their territories, are in one wing. Everyone else is in the other. Each cell has 16 bunks, but each wing contains about 300 men, and it's about 60 or 70 to a cell, with hammocks hung to make up the bed-space. I follow Pierre around as he goes from cell to cell, talking with prisoners.

When Rio de Paz first came here six months ago, the cell doors were locked. Now, the prisoners can at least move from cell to cell within their wing and mill about, shoulder-to-shoulder in the corridor. But the truly savage thing about this place is that at no time can they go outdoors. The only windows are high on the walls of the corridor, and even through them the sky is concealed by the eaves of the building.

When Rio de Paz comes here in force, they clean the cells and bring doctors, and dentists to pull teeth. But Pierre's focus today is on bringing them information, because most of these men have no idea when they will leave this place. Many of them have already been tried, but have been sent here because there is no space for them elsewhere in the overwhelmed system. One man has been here for four years. Others are technically free men, but the word simply hasn't yet trickled down to the administration here. Half the occupants of every cell are lying on bunks or on the floor, eyes rolled back in their heads, comatose from the heat (even outside, it is 41° Celcius). In one cell in the Commando Vermelho wing, there are two men with moist plaster-casts on mangled limbs. An 18-year-old boy shows us a badly broken leg that has not been set properly, crippling him for life. Another man removes his peg-leg, and tells us he has tuberculosis and Aids. An emaciated 60-year-old emerges from the depths of the cell: four months ago, lawyers working for Rio de Paz proved, with fingerprint evidence, that he was innocent, and had this evidence accepted by a judge. In the other wing, there is a man in a wheelchair. When Pierre takes photographs, the men hide their faces in unison. But not captured on camera is the awful way in which they do this, lowering their heads between their knees, or turning towards the wall  — swooning in resignation, misery and shame.

The only other place where the inmates can go is an additional cell with benches along the walls. This is where they receive visitors, and here, among the wives and girlfriends and children, I meet a 33-year-old from Complexo do Alemão, one of Rio's largest and most notorious favelas. He gives his name only as Dilão. In the favela, he commands the men in a particular area and answers to a "general". Here, he is the ranking man in the CV wing. "In the Commando Vermelho, you have to take care of the community. When I am in prison, I have a duty to the 300 men here. If I do something wrong in here, I pay for it on the outside. But I don't, because this is my blood. In the favela, we do what the state should do. The police never come to the top of our hill, but we are there from generation to generation, providing for the community-gas, medicine, repairs. We are not killers. I sell drugs to whoever wants them, I don't tell people to come to my favela." Dilão has been in the drugs business since he was 13. He makes in a day what it would take him a month to earn in a legitimate job, but now he's serving an eight-year sentence. I ask him if it was worth it. "I had 15 years on the street and now I have spent five years in jail. That is the price. Every action has a reaction." I ask him if he would ever leave the drugs trade. "I would like to one day, but it is too late for me now, this is my blood now."

In the opposite corner of the cell, a little girl is dancing with her young father, beaming up at him, her feet planted on his. I ask Dilão about his family. Seventeen of them — his wife, his brother, all his cousins and all his cousins' wives — are in jail for drug dealing. But his four children are "with the church". He wants the straight life for them, and has moved them out of the favela.

Dilão says that the police, "kill people who surrender like putting on a sock". They also sometimes sell captives to other factions to be tortured and killed. This happened to him, but he managed to buy himself out of it with 20,000 reais (about £6,900). I ask him about the UPP initiative. "I wouldn't go out on the streets to commit barbaric crimes like the other factions," he says, "I have no problem, because I would just go to another favela and resume work the same day with the Commando Vermelho there. Or — and why not? — invade one that belongs to one of the other gangs. That's when you see us in 20 cars, with all our weapons. You're going to be seeing that a lot more now. It's too late for the government, we're too powerful. They are doing this UPP now, but it's like paper and fire, an illusion. The past tells us that in a short time all the policemen will be corrupt. There is nothing easier in the world than the corruption of a police officer."

Finally, I ask him a bit more about what he and his friends do for their communities. With all that money, why not pay for some children to go to university? "I take care of my own kids. I can't take care of everyone else's." Dilão grins and shakes my hand warmly. Then he turns to more important business. They want to buy an air-conditioner for their wing, and Pierre has done some research for them. Other men from the Commando Vermelho gather round, and together they frown over his printouts, nodding, calculating and discussing their options.

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