Economist story.
Starts with "City of God" (2002) film reference to Rio's rundown Cidade de Deus housing project, where a gang of drug traffickers kept 60k residents in lives of constant fear. The film cemented Rio's reputation for lawless favelas (a Brazilian term for tightly-packed slums), as well as its sad decay after the country moved the capital to Brasilia in 1960.
With the Olympics teed up for 2016, Rio now seems to be undergoing a renaissance:
Last year the police tool control of Cidade de Deus--this time for keeps, they say. A force of 318 officers, backed by 25 patrol cars, is based in a new community-police station in a side street between two fetid, litter-strewn drainage channels. The result has been dramatic. IN 2008 there were 29 murders in Cidade de Deus. So far this year there has been just one . . . Other crime has fallen too.
A key factor: getting all levels of government to chip in and double the salaries of front-line cops. The focus: to formalize the existing economic activity with legality and infrastructure.
Sounds like your basic COIN, yes?
The external driver: Rio becomes the hub for off-shore oil development of that huge oil field just found, plus there's those Olympics and all the construction triggered.
Rio has a ways to go, but the trend is positive.