Booming Brazil struggles to get a grip on crime

By Stuart Grudgings

RIO DE JANEIRO (Reuters) - Stretched out on a beach framed by the sparkling Atlantic Ocean and a violence-plagued slum in the background, Pedro Mena Barreto speaks of crime with a sense of hopelessness that is common in Brazil.

He remembers when he could leave his windows open at night and hear the birds in the forest behind his apartment in Rio de Janeiro's beach district of Leme. Now he is kept awake by gunfire between gangs fighting for control of the drug trade.

"You need to have drastic measures, but justice here is soft and slow," said Barreto, a 76-year-old doctor who was sunbathing on the beach near Copacabana, not far from where gang battles have terrified residents in recent days.

"I don't see anything that's going to solve this."

Despite President Luiz Inacio Lula da Silva's achievements in nurturing a strong economy and social programs that are lifting millions out of poverty, crime remains a stubborn problem on which his government has made little impact.

After Brazil's economic policies received an international seal of approval with investment grade status last week, former union leader Lula said he wanted foreigners to put more money into factories to create more jobs.

But analysts say crime is effectively a tax on such investment in many parts of a country that has one of the world's highest murder rates and where there are more private security guards than police.

The Institute of Applied Economic Research, a government think tank, says that criminal violence cost Brazil the equivalent of 5.1 percent of its GDP in 2004, including lost income and private security measures such as the armored cars popular in big cities.