Prison-based gang First Capital Command (PCC), whose organizational ability and discipline exceeds that of the Brazilian correctional facilities, has orchestrated a robust attack against the Brazilian state of S?o Paulo. Since May 2006, the PCC has launched three waves of attacks against police and civilians that have killed more than 200 people and destroyed a significant percentage of S?o Paulo’s business infrastructure .
Remarkably, throughout this period of criminal unrest in Brazil’s largest city, the Brazilian economy has maintained a steady GDP growth of 3.55 percent for 2006, Brazilian real wages have continued to rise, and social welfare programs have lowered income disparities to their lowest levels in 30 years. Current incumbent President Luiz In?cio Lula da Silva has sought aggressive education reforms to counter the growing influence of organized gangs and drug growth. However, economic growth and educational reforms have had little effect on overall security, and, notwithstanding a comprehensive campaign to diminish the power of the PCC, similar criminal uprisings are likely.
Threats to Brazilian Economy and Foreign Businesses Operating in S?o Paulo
The central government must recognize the threat the PCC poses to the country’s economic stability. Although Brazilian commerce has remained steady, this resilience is unlikely to continue in the long-term. Rampant criminal unrest will hinder the continuation of Brazil’s GDP growth and will sway foreign investment in the country.
Likewise, foreign businesses operating in S?o Paulo, particularly foreign banks, should be aware that PCC gang members regularly target operations. PCC attacks throughout the week of August 6 damaged and destroyed 32 bank branches and automatic teller machines. The exact reasoning of the PCC targeting of foreign banks is unclear but is likely to continue in subsequent outbreaks of violence. Additionally, foreign nationals should refrain from public transportation. PCC gang members frequently torch Brazilian buses and subways, and, although passengers are warned and allowed time to exit, the threat of injury exists.
The PCC as Brazil’s Top Narcotics Cartel and Organized Crime Syndicate
Although the PCC continues to champion human rights improvements within the Brazilian prison system?the original purpose of the gang–the group has become Brazil’s top narcotics peddler. PCC members control Brazil’s infamous favelas (slums) with imprisoned PCC leader Marcos Camacho leading operations from his prison cell via cellular telephone. Improving conditions within Brazil’s penal system is now secondary to the PCC’s acquisition of turf, power, and wealth .
Increasing numbers of Brazilian youth are addicted to drugs, leaving them one of the fastest growing groups of addicts in the world. A large segment of the addict favela population is dependent on the PCC or other smaller gangs operating throughout the country. Drug addiction and criminality will hinder this generation’s usefulness in both Brazilian society and economy, ensuring a diminishing value of return.
Through the direct and indirect actions of the PCC, the current and future growth of the Brazilian economy is being hindered. Moreover, PCC operations and the social and economic degradation of the Brazilian state are being secured while the central leadership and security apparatus sits idle.