* Crime a big part of Brazil’s competitiveness problemBy Guillermo Parra-Bernal, Brian Winter and Bruno
MarfinatiSAO PAULO, Oct 13 (Reuters) - It was around midnight on a
Saturday when a group of men in gray overalls calmly strolled
into a bank on Brazil’s equivalent of Wall Street, waved to the
guard and said they were there to fix the alarm.More than 10 hours later, they had pulled off one of
Brazil’s biggest bank heists — emptying out more than 100
safe-deposit boxes for a multimillion-dollar bounty of rubies,
Colombian emeralds, antique Rolex watches and cash.No alarms went off, and the guards offered no resistance.
The thieves were so relaxed, in fact, that they reportedly
ordered fast food and then left the wrappers behind with their
tools: a set of drills, a blowtorch and a chain saw.The Aug. 27 robbery at the Itau Unibanco bank on
Sao Paulo’s Avenida Paulista, and the inept investigation that
followed, highlight the security challenges still facing
Brazil. Despite considerable progress in some areas, crime
remains a major drag on the economy, and it is arguably one of
the biggest obstacles standing between Brazil and its dream of
attaining rich-world status in the coming decade.The economic consequences of Brazil’s crime problem can be
seen everywhere — from pockets of poverty that have so far
been untouched by a long economic boom, to less obvious areas
like a long slump in Brazilian manufacturing.One of the first things visitors notice in big Brazilian
cities is the astounding number of private guards in suits
keeping watch at hotels, restaurants, apartment buildings —
virtually any place where there’s money.The costs are massive. All told, Brazilians spend about as
much every year on private security — roughly $8 billion — as
the U.S. government spent on security contractors such as
Blackwater during the first four years of the Iraq war
combined, according to data from Brazil’s biggest private
guards’ union and the U.S. Congressional Budget Office.There are also less obvious security-related expenditures,
such as high insurance premiums. Executives in Sao Paulo,
Brazil’s business capital, have spent an untold fortune on one
of the world’s largest fleets of helicopters and armored cars
as they try to evade assaults.Even the city’s notorious traffic, which costs billions of
dollars a year in lost productivity, is partly a consequence of
crime, as people who are too scared to take public transport
choose to spend hours a day in their cars instead.Add all that up, and security is right there with high
taxes and heavy bureaucracy as one of the biggest elements in
the so-called “Brazil cost” — the high operating expenses that
make Brazilian goods so expensive compared to other countries.Officials will likely have to get a better handle on the
problem if President Dilma Rousseff is to fulfill her goal of
making Brazil a middle-class country by 2020.”The trend is positive … but there’s an enormous amount
of work still to be done, and the cost to the economy in the
meantime is substantial,” says Geert Aalbers, general manager
for Brazil for Control Risks, a security consultancy.FALLING MURDER RATES A HOPEFUL SIGNIt’s hard to tell which was scarier — the Itau Unibanco
heist itself, or the investigation that followed.For reasons that are unclear, police did not begin their
investigation until about a week after the robbery, a source
close to the probe told Reuters on condition of anonymity.The two guards inside the bank were not interviewed by
police until 11 days after the heist, the source said.One of the 12 or so robbers has since been caught. Yet that
has done little to quell speculation in Brazilian media that
police were somehow involved with the heist — especially given
the eerie confidence with which the robbers acted.Marcos Carneiro, a top official for the city’s civil
police, admitted the probe had been plagued by “operational
flaws” but denied police involvement in the crime.Looking beyond the Itau Unibanco case, Sao Paulo officials
acknowledge problems but also highlight major advances —
namely murders, which are down 75 percent in the last decade.At 9.9 per 100,000 people, Sao Paulo’s murder rate now
compares favorably to many big U.S. cities such as New Orleans
(51.7), Washington, D.C (24.0), and Houston (12.6).Antonio Ferreira Pinto, the public security chief for Sao
Paulo state, attributes the improvement to better technology,
bigger police budgets and civic policies that reduce crime,
such as early closing times for bars in troubled districts.”Our big priority since the 1990s has been murder, and we
needed to focus on that above all,” Ferreira Pinto said. “Our
next priority is property crime, without a doubt.”Sao Paulo is clearly safer than it was a decade ago. The
evidence is not just in data but in street scenes: a commuter
train full of people fidgeting with their iPhones, middle-class
revelers walking late at night downtown, and other glimpses of
normal urban life that were hard to find not so long ago.Nationwide, the number of bank robberies has actually
plummeted in the past decade — from about 3,000 a year to just
343 in 2010, according to Brazil’s main banking federation.Security progress has been even more dramatic in certain
areas of Rio de Janeiro, where the murder rate has also fallen,
and banks and other companies are opening up shop in troubled
neighborhoods for the first time.Helping matters further: Brazil’s robust economy, which has
lifted 40 million people from poverty in the past decade,
reducing social inequality and unemployment.”Things are slowly improving, especially in the biggest
cities,” said Nivio Nascimento, an official in the Brazil
office for the United Nations Office on Drugs and Crime, or
UNODC. “For the first time, you have an alignment between
levels of government that have made (crime) a priority.”POLICE “DON’T HAVE THE RESOURCES”Despite the progress, business leaders say they see no end
in sight to their decades-old arms race against crime.The reason: While the number of crimes has fallen in some
areas, those that do occur are getting more sophisticated —
and are more likely to target high-value assets, as the Itau
Unibanco assault shows.When police crack down on one kind of offense, crime
syndicates simply move on to a new, more vulnerable target. In
Sao Paulo, it seems like a different crime comes into fashion
with every month: February saw a wave of assaults on apartment
blocks, June saw restaurants fall victim, and now it’s banks.Meanwhile, officials are discovering that economic growth
can often fuel crime rather than stopping it. In parts of
Brazil where the economy is booming but law enforcement is
weak, such as the northeast, murders and assaults have soared.”We don’t see anything that would allow us to reduce our
(security) costs, and I’m not optimistic,” said Abram Szajman,
president of the Fecomercio business association in Sao Paulo.”The authorities simply don’t have the resources to deal
with this problem,” he added.Ferreira Pinto, the Sao Paulo security chief, doesn’t
dispute that. “We have our limitations, companies are aware of
them, and they end up taking care of themselves,” he admitted.The UNODC’s Nascimento says that Brazil could make inroads
by focusing more on border enforcement to slow the flow of
drugs. He also said that improvements to the justice system,
including better enforcement of minor crimes, could prove
effective against both petty thieves and organized crime.”They need to remember that it was tax evasion that got Al
Capone,” Nascimento said with a laugh.Yet the outlook for game-changing reforms under Rousseff’s
administration is bleak. A government official told Reuters
that Rousseff is “concerned” about the recent security problems
but sees crime as primarily an issue for states and municipal
governments — a stance echoed by her predecessors.”I think we’re 20 or 30 years away from any serious
improvement,” Szajman said. “It will require education … a
change in mentality. There’s no guarantee of success.”
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