Violent crime is rising in Brazil and, if past trends hold true, that could be bad for the business community during a time when the Brazilian economy is already suffering.
Last Thursday night, Sao Paulo, the largest city in Brazil, saw the deadliest of six massacres this year. At least six men carried out the attacks, killing 18 people. A task force of 50 police officers is investigating the attack, including the allegation that off-duty or former police officers were involved.
Sao Paulo, like other cities in Brazil, has been the victim of high tensions between civilians and law enforcement. Amnesty International reported that military police in Rio de Janeiro, the site of the 2016 Summer Olympic Games, were responsible for 1,519 killings in the last five years – representing almost one in six homicides in Rio. In 2013, Brazil had nearly 27 violent deaths per 100,000 people, which is over four times the global average.
Nonlethal crime has also risen. Brazil has the largest number of reported rape cases and highest rate of robbery in Latin America. The growth of organized crime involved in the drug trade contributes to these high crime rates.
Although present throughout the country, crime rates differ across regions. Crime is rising in less affluent cities in the northeast, but the southeast has generally improved in recent years.
Rio de Janeiro, in particular, has experienced improvements since 2008 through the government’s “pacification policy.” Specialized military police units drove out gang leaders from slums, known as favelas, for the Pacifying Police Units (UPPs) to establish stability and enable social and economic development. In the following four years, homicides fell by 75 percent in the favelas, twice as fast as elsewhere in Rio. The pilot program could become a model for future crime prevention in the rest of Brazil.
The fear of violence may discourage businesses from investing in, or expanding business to, Brazil - especially in the context of Brazil’s shrinking GDP, rising inflation, and rising unemployment. Firms in Brazil lose almost twice the percentage of annual sales compared to those operating in other parts of Latin America and the Caribbean due to crime. Companies that are not deterred will need to manage exposure to crime – 72.6 percent of firms invest in security services in the country, ranging from installing security cameras to hiring body guards.
Alana Garellek is an analyst with The Cipher Brief.
