Ahead of the Brazil 2014 World Cup, Things Are Getting Out of Control

Rio de Janeiro's popular tourist beaches have once again come under attack. Favela youths are swooping down en masse in what are known as arrastões (Portuguese for "dragnets"). During these raids, the mob steals everything in sight, beats anyone who dares to resist, and disappears back into the slums.

While the dragnets were common during the '80s and '90s, they had largely subsided until this year. The official response to their reappearance has been to increase the police presence along the tourist beaches.

Urban crime in Rio de Janeiro — and probably most of urban Brazil — has a lot to do with poverty. The country's poorest have little opportunity for advancement, making crime a relatively attractive alternative. For this segment of society, trafficking and petty theft are far more lucrative than the formal economy.

The Brazilian economy has suffered a major slowdown over the last few years. GDP growth in 2013 was less than 1% — down over 6% since 2011 — and the outlook for the labor market is tenuous at best.

The Custo Brasileiro — Portuguese for the Brazilian cost — refers to the the added operational overhead for business in Brazil that comes from corruption, excessive taxation, bad labor law, and other legal and political obstacles. The drag on the economy was offset by Chinese demand for Brazilian commodities, but as the Chinese economy has slowed, the economy has again started to feel the weight of the political system.

The weaker the economy gets, the more attractive criminal activities like marauding tourist beaches become. As Rio de Janeiro gears up for the 2014 World Cup and 2016 Olympic Games, it's likely that many foreigners will make easy targets for local thieves. The official response is guaranteed to be heavy-handed, but the increased police presence isn't going to fix the underlying problems and may end up making them worse — Rio's police force is considered one of the most corrupt in Brazil.

As recent protests indicate, there is a growing segment of Brazilian society that is fed up with business as usual. There doesn't seem to be any consensus on how to move the country forward, but the discontent is there in a way that it hasn't been before. Unfortunately, dysfunctional political systems are often like junkies: recovery — or in this case, reform — requires hitting rock bottom. Things aren't great in Brazil, but they're nowhere near as bad as they could get. It'll take more and much worse than the return of the arrastões to force reform; and for better or worse, the country may get just that.