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If you ever find yourself in Brazil, advises Misha Glenny, try to look past the samba, soccer and sea. The journalist, who is currently researching a book on the underground drug trade in Rio de Janeiro, sees a Brazil of challenges, contradictions and opportunities that are far more complex than the celebrations on Ipanema let on.

During an in-office TED session, Glenny took a look at Brazil’s long, winding history and showed how the nation’s pervasive economic inequality traces back to Portuguese colonialism. We can still see the effects today, he asserts in the talk above, a TED Blog exclusive.

2014 is arguably the biggest year in Brazil’s history, as economic hopes, social gains and national pride converge in this year’s World Cup. It’s the first time since 1950 that Brazil has hosted the tournament. Since the country has seen huge strides in economic growth and social programs in the new millennium, hopes are high. But the picture is not all rosy — inequality is still incipient, and concerns about violence and protests leave many worried about the fate of the games.

The TED Blog caught up with Glenny to learn more about the palpable energy building up to this World Cup, especially in Rio de Janeiro, which will host TEDGlobal 2014 months after, in October. The political, social and economic context of this tournament is unprecedented — and Glenny says the events of this summer could make or break Brazil’s hopes for the future.

Below, an edited transcript of this fascinating conversation.

Let’s talk about the current atmosphere in Brazil. Why is this World Cup such a pivotal moment?

There’s a sense of real uncertainty. There’s a sense of a turning point — but without any real confidence as to whether it’s turning backwards, forwards, left, right, up or down. How did we get to that stage? I think you had two very important things—the presidencies of Fernando Henrique Cardoso and Lula da Silva. Fernando Henrique did a great deal in terms of bringing down inflation and laying the foundations for the social policies which Lula then implemented. The paradox of the two presidencies is that, in visibility and charisma, Lula outshines Fernando. But despite being seemingly on either side of an ideological divide in Brazil, they actually complemented each other really well.

Those leaders were in charge from 1995 through 2011. What’s the legacy three years later?

A lot of this was based on the commodity boom, which came to a halt fairly rapidly after the collapse of Lehman Brothers. So rather than seeing fundamental structural changes in the Brazilian economy and society, you saw the whole ship rising with commodity prices. People were getting better rations, basically. But since the recession hit Brazil, one is beginning to see just how superficial and insubstantial the investments were. So there was a lot of money pushed into the consumer economy, and importantly into the most poverty-stricken standard of living, to shove them just over the bread line. But these hid real problems, which are now coming to the fore.

Where do the World Cup and Olympic bids fit into this picture?

The decision to apply for the World Cup and the Olympics took place when Brazil was in full flight as the sort of new master BRIC. Despite having a considerably smaller economy than India or China, Brazil was punching at an equally powerful weight. They had seen what happened in China in the Olympics, and thought, ‘We can do the same.’ And when I say ‘they,’ I mean the government and the elite. There’s an easily definable elite in Brazil—it’s small, powerful, and inordinately wealthy—and they basically said, ‘We’ll have the World Cup, we’re Brazilians, we’re great at football, it’ll be a fantastic festival. We’ll have the Olympics, and everyone will think that we’re the most diverse country in the world.’

And then two things happened: the recession, and the Brazilian tradition of corruption in major state-sponsored infrastructural projects. Immediately contracts emerged for the construction of the stadia, which were uncompetitive and sent huge sums of state money into private hands. And the current president, Dilma Rousseff, failed to see beyond the big statist or semi-statist companies like Petrobras, the oil company, or Vale, the mineral extraction company, or any of the construction companies, which are huge entities inside Brazil and have a profound history of corrupt practices that they have engaged in with the government. All these things came together as the world economy was collapsing. And what that meant is that Brazil was exposed as being incompetent in terms of delivering on the major infrastructural projects.

The World Cup will have a big impact on Brazil. Journalist Misha Glenny thinks it could do great things for the country, or bring to a head big problems. Photo: Flickr/Joyce Kelly Campos

What other factors are contributing to this situation?

Two other things. Brazil’s first generation of a middle class that is fully educated up to university level has tremendous expectations economically and is looking for jobs appropriate to their education. But those jobs don’t exist. And so you get a middle class that wants a proper health system, proper transport and jobs that reflect the investment that they’ve made into their education. There has been little preparation for this on the part of the elite.

What we saw last summer with the protests across the nation was a specific assault on the establishment. The demonstrators numbered a million-plus in over 100 cities in Brazil and, for the first time, included the PT, the worker’s party, the party in power. These demonstrations were entirely spontaneous. Nobody was expecting them, working on the assumption of a tradition of popular passivity in Brazil. And they coincided with the Confederations Cup. All of a sudden, the demonstrators realized they could really disrupt things — they could embarrass all of the elite and basically hold the Confederations Cup to ransom.

And when Dilma took part in the opening game, she was booed. Not just by people surrounding the stadium outside, but people inside the stadium. The assumption is that Brazilians love football, more than anything else. What the demonstrations showed is that they care about their education, their transport,and their health even more than they care about football. They realized that, during the World Cup, their impact could be massive.

Do you think protests will surface again next month when the games start?

It will depend on how Brazil does in the World Cup. I mean, it’s a fascinating intersection of politics and popular culture. If Brazil were to go out in the first round—which is unlikely but not out of the question—this would be a real problem for the government. Which is why as soon as anything happens like Neymar’s toe getting injured, this is not just a run-of-the-mill football injury—this is a matter of state. I mean that. It is discussed at the highest levels. Fortunately, it’s not a broken metatarsal, which would’ve ruled him out. It’s just a basic stubbed toe.

The other factor is urban violence. The big focus of this—although in statistical terms, by no means the most violent—is Rio. The difference between Rio and the rest of the cities is that the favelas are inside the city center.

All of the favelas in the center have been pacified under the UPP program, which is whereby you go in with urban shock-and-awe first, and you neutralize either through arrest or through killing or through expulsion, the leaders of the drug cartels. Then you put in supposedly touchy-feely police forces, who are meant to be like Swedish policemen and policewomen, but of course they’re not. The final phase is what’s called the Social UPP, which is backing up with health, sanitation, schools — the basic structural things which are pretty thin on the ground in the favelas. That Social UPP hasn’t really happened at all.

Now, you’re seeing the police getting slightly out of control. One or two very important deaths have contributed to a collapsing of trust between favela residents and the police. We just saw in Pavão-Pavãozinho, a favela right next to Copacabana, a favela resident was shot by a police bullet. That collapse of trust allows the traffickers to come back into the favelas. This is what’s been happening over the past four to six months. The pacification program, whose primary motivation was to ensure that tourists were all going to have a great time during the World Cup, is coming apart at the seams.

What the government faces as we lead up to the World Cup is a problem on two fronts. One, is middle-class youth, full of idealism, radicalizing. They might take to the streets, surround the stadia, use the World Cup as a way of expressing their anger and disgust at corruption throughout the administration on a state, provincial and municipal level. And on the other hand, there’s the danger of trouble in the favelas spilling out into the tourist areas. Were the two to coincide, that would be a perfect storm of disaster for the Brazilian government.

We are at a very delicate, difficult moment politically, with a weak leadership that is eyeing the presidential and some state elections in October. The president’s popularity ratings have dropped over the past three months from about 48% down to about 36%. But the opposition remains firmly rooted in two other main candidates, and they have even lower approval ratings of 15% or 7%, meaning that they’re not able to take advantage of her rather stark decline. But everyone knows that nobody is able to predict what’s going to happen during the World Cup. All bets are off.

It seems like the UPP programs are being implemented to prepare the city for tourists, rather than focusing on improving the wellbeing of residents. What happens after the sporting events are over? Do you think these programs will actually benefit favela residents?

It’s worth pointing out that since the UPPs were implemented, there has been a significant drop in the rates of murder and urban violence in all of the favelas that have been pacified. In that sense, they improved the quality of people’s lives unequivocally. The drug cartels veered between being enlightened despots and North-Korean-style dictators, and maintained social control through fear.

But it is a slightly more complicated picture. The civil order of the favelas is less predictable than it was. There’s still petty crime. Crimes against women, in particular rape and domestic violence, have increased. In principle, pacification is a very interesting and potentially important policy innovation. But the backup on social programs is not receiving the resources and attention it requires and this will backfire on those who are supporting pacification in the midterm election.

There’s clearly a desire to clean up areas where businesspeople and visitors from outside come. It’s clear which ones are prioritized. There is a deep suspicion amongst some favela residents that this is all really just preparation for a gentrification of these areas in the center of town. When they were established during the colonial period and the first half of the ‘20s, people didn’t want to live on the hills, because they had to walk up them to get home. Middle-class and rich people liked to live near the beaches. Now, of course, living on a hill gives you a spectacular view— some of the favelas in the South Zone, which is where the tourists are, have the best views in Rio. And now you can just drive up the hills by car. So there is a fear that pacification is really just a prematch warm-up for the removal of the favelas and replacing them by up-market properties for which people will pay huge sums of money.

We don’t know if that’s the case. Vigidal, a favela in the South that overlooks Leblon and Ipanema beaches, is referred to as the “West Village of favelas,” because it’s attracting artists and IT people, and designers. But I’ve spent a fair bit of time in Vidigal, and it’s still a favela. The electric supply is still crap, the supplies are awful, as is the sanitation. [To gentrify it], you’d have to go in there and either give people money to get out or just bulldoze them out. I don’t think they’d do either.

Journalist Misha Glenny, a regular TED speaker, has spent the last year doing research in Brazil. Photo: James Duncan Davidson

Who has legal claim to the land in the favelas? Are there property titles?

No. The UPP is meant to distribute titles and put up a property register. At the moment, possession is basically 9/10 of the law and it’s desperately, desperately confused. People need to understand what their relationship is to property and, at the moment, we don’t fully know. If pacification had the proper resources behind it—if you had a social UPP and you had clear urban planning that worked in cooperation with the residents—then pacification could be a spectacular thing. But it’s far too premature to suggest that that is the case.

Are you seeing favela communities working with the UPPs?

They do. You can’t underestimate the impact of the collapse in the level of urban violence — of murder and crossfire between the police and the traffickers. It’s a big difference in your life when you know that if you walk down the street, you’re not going to get a bullet through your leg or through your head.. These communities were prepared — all of them — to give the UPP police force the benefit of the doubt.

Some favelas, particularly the smaller ones that are dotted around the South Zone, are relatively content with the way things have worked out. But in the bigger ones—ones where there has clearly been an abuse of power by the police, like in Rocinha, the biggest one, or in Pavão-Pavãozinho, Complexo do Alemão or Complexo da Mare, which is very, very tense —you have seen a loss of trust, so that cooperation is less likely than it was, say, six months ago. Still, some favelas are, in principle, happy to work with the police.

Let’s talk more about the protests—those from last summer, and the potential for another wave this summer. People are realizing that they have a voice. What are they asking for? Do you think their requests will materialize?

There are a lot of specific, local demands. The protests started in São Paulo, with the demand to rescind a rise in transit fares. But in each city, specific grievances change. In Rio, people were protesting poor public health and the fact that traffic is so gridlocked that everyone takes three or four hours to get to work in the morning, particularly if you live in the outlying favelas. In cities which stadia were built, the focus was on the amount of public money poured into those projects, which are all privatized.

The three things highlighted in all the cities were: health, education and transport. The other big focus was corruption. Until last November, no politician had ever been sentenced and imprisoned for corruption. That changed when about 10 members of the PT were imprisoned for the Mensalão scandal, basically an election-financing rigging operation. What everyone who went out onto the street last time wanted was to see is that when you are investigated and accused of corruption, you go to trial, and that if you’re found guilty, you go to prison. Things have improved slightly in the past two years — but the whole thing is unacceptable. At the moment we still have a situation where you can be sentenced for corruption on a grand scale and, within a decade or so, you can be back in public office.

The problem is that the colonial legacy, which I talked about in the TED Talk above, is so powerful with respect to this—the culture of corruption on a parochial, quotidian level as well as grand corruption between the political and economic elites. These are practices that have established very deep roots in Brazil, down into Brazil’s soil. Ripping them up is going to take a long time. There are signs that some people are fed up—and that’s a very good thing.

Do you have any predictions on how all these dynamics will play out this summer?

Everything is going to revolve around the World Cup. I’d say it’s 50/50 as to whether people take to the streets in large numbers. That will be what defines the year for Brazil—it will have implications for the presidential elections in October. If things go wrong, they can go very wrong. If things go well, that may be sufficient for a significant shift in mood away from the negative, which dominates much of the country at the moment, Fingers crossed, I hope that will happen.

All this aside, Brazilians are really geared up for the World Cup. They are hoping and expecting that Brazil will win, and Brazil is still one of the four favorites for this championship. It will, without question, be a real boost to Dilma, but also to Brazil’s image, if the team does win.

Those who wish Brazil well in its present troubled circumstances should, I think, hope that Brazil wins the World Cup. Some people — some Brazilians I know — would argue that Brazil should go out in the first round so that there will be chaos, which will then be cleared up by people introducing a more rational system of government. That’s the speculation. But most people, I think, will want to see Brazil win the World Cup and restore its self-confidence, which five or six years ago was sky-high.

TEDGlobal 2014, themed “South!,” will be held in Rio de Janeiro on October 5-10, 2014. Check out the first 40 speakers for the conference and find out how to apply »

Watch Misha Glenny’s previous TED Talks:

Misha Glenny: Hire the hackers!

Misha Glenny: The real story of McMafia -- how global crime networks work