Brazil plans to clean up its notorious favela slum dwellings in Rio de Janeiro and other cities as part of a major security augmentation program before the 2014 World Cup and the 2016 Olympic Games.

The government is actively improving security in the favelas, sometimes with bloodshed, before the World Cup and Olympic Games, the latest Brazil Defense and Security Report for the fourth quarter of 2011 said.

In advance of the 2014 FIFA World Cup and the 2016 Olympic Games in Rio de Janeiro, the government is actively working to improve security in the favelas in the city which, according to the municipal government, are home to 1 million people out of Rio's population of 6 million, said the report published by Research and Markets, Dublin, Ireland.

"Headlines in the mainstream media highlight that the authorities are using three measures to end the control of the favelas by rival drug gangs. Police and troops have undertaken military-style occupations of favelas, in some instances, with blood being shed," the report said.

The security forces' crackdown in the slum dwellings is one of the least reported developments in Brazil's effort to improve national image before the two major sport events.

As part of the cleanup, police units started using permanent bases in the favelas and Police Pacification Units aimed at removing links between favela residents and organized crime and drug gangs.

In some of the shantytowns, police constructed bases in a bid to better administer its law enforcement policies.

In June, Brazilian President Dilma Rousseff announced a new "strategic border plan" that aims to deter stamp out border smuggling and will be overseen by Vice President Michael Temer. The government has already indicated it wants to dramatically increase the number of troops in the border areas and offshore regions being developed as hydrocarbon production and export hubs.

A new integrated system for border surveillance includes radar coverage along the length of Brazil's frontiers for which the government has already ordered additional equipment, Research and Markets said.

The report said Brazil's procurement expenditure would likely amount to around $128 billion over the long term.

"Brazil is an excellent example of a large but, previously, relatively poor country whose government is sensibly taking advantage of a resources-led boom to undertake a radical reform of the armed forces," Research and Markets said.

In the short term, though, the government has cut $2.4 billion from the $9 billion procurement budget for 2011-- part of a general policy that involves a drastic reduction in government spending to reduce inflationary pressures.

When procurement resumes in 2012, it is likely that attention will return to the FX Fighter Replacement Program -- the large-scale purchase of jets for the air force. The cost of the planes could easily exceed $6 billion and substantial maintenance contracts would add to those costs.

The program remains a three-way race between Boeing's F-18, Dassault's Rafale and the Saab Gripen, the report said.

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