It’s an historic time for Brazil.  The economy continues to grow, and the Lula government’s social programmes, like the Bolsa Família programme of subsidies for poor families, have reduced poverty.

In this healthy Brazil, the residents of Rio de Janeiro’s favelas live in a bubble of misery and exclusion. Without public services or infrastructure, these ghettos have been ignored by successive governments for decades. The government of President Luis Inacio "Lula" da Silva and the state of Rio de Janeiro want to reclaim these areas and reintegrate the two million favelados, a third of the city’s population, into the social fabric.

To maintain a healthy economy, reduce social inequalities and revitalise the favelas, the country has launched a multi-year programme of investments called PAC, the Portuguese acronym for Growth Acceleration Program. By 2010, 200 billion euros will be invested among all the regions of the country.

The priorities of PAC are:
- the energy sector (100 billion euros)
- infrastructure and transport (23 billion euros)
- urbanisation and social projects (68 billion euros)

Half of the PAC budget earmarked for the state of Rio de Janeiro, 700 million euros, will be invested in the favelas on urbanisation and sewage work, housing, hospitals and schools. The three largest of Rio’s 700 favelas are the priority.

The Complexo do Alemão favela and its 200,000 residents, for example, will benefit from a 160 million euro budget.

The favelas are like war zones ruled by young, heavily armed drug dealers, and the slums’ only encounters with state institutions are violent incursions by the police.

In 2007, the Rio police killed 1,330 suspected criminals in combating drug trafficking, and on June 27 last year, 19 people died in one police operation in Alemão.

The police hope that that the PAC will help in their fight against drug trafficking.

In Complexo do Alemão, work funded by PAC has begun, but the population lives in fear of a new war.