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Crack addicts consume the drug on a street in Sao Paulo March 20, 2012.Paulo Whitaker/Reuters

The people who live here call it Cracolândia: a treeless few blocks in the heart of Sao Paulo, South America's biggest city. The name is a dark homage to Disney – a place, they say, where you go to do what you want.

But there is no magic in this kingdom: Instead there are a few hundred people living in the ruins of old high-rises, and on the sidewalks, their only furniture stained mattresses and piles of rags. Their skin is a uniform charcoal colour, a mix of sunburn and years and years of dirt. In the bright sun of midday, they sit on the curbstones, smoking crack through jury-rigged pipes, exchanging muted conversation and the occasional harsh burst of laughter. The wind blows up a funnel of trash and plastic bags; they watch unmoving as it cyclones around them.

Cracolândia has been here for 15 years, by the best guess of its denizens. Its population hovered around 1,500. And until a few months ago, life here followed a grim routine. The police swept in every so often, arresting some of the addicts and chasing others off; they would make a desperate shambling parade, clutching their grimy possessions and bedrolls, walking the city streets for a day or two until law enforcement turned its attention elsewhere and they could return to their familiar sidewalks.

Then, late last year, the city launched a bold new policy to reclaim Cracolândia in typical Brazilian style: with little empirical basis, but a conviction that citizens in an emerging superpower deserved better. The initiative is called Braços Abertos (Open Arms) and is a many-pronged effort to house and feed and employ addicts, to end their "social exclusion" in an effort to help get them off drugs.

"These people are the most miserable of the miserable," says Myres Cavalcanti, co-ordinator of Mental Health, Alcohol and Other Drugs for the city of Sao Paulo. "And the state of Brazil has the money to take care of them."

Brazil has an estimated one million crack users, the largest population in the world, and it has tried a dozen different ways to tackle its drug problem, with little to show for it. The question in Sao Paulo today: Can a program built on gut instinct and grit turn things around?

Healing through weeding

It has been decades since North Americans worried about the urban blight caused by crack. Opioids and methamphetamine draw the headlines (and the bulk of the public-health response). But as Toronto Mayor Rob Ford has made clear, the cheap and trashy iteration of cocaine never went away: It remains a widely available street drug in North as well as South America.

In Brazil, however, crack isn't just widely available. Crack is king.

Partly because of the proximity to supply (a vast, porous border with producing nations Colombia, Bolivia and Peru), cocaine has long dominated the drug market here; there is comparatively little use of injectable opioids such as heroin. And crack is the easy-to-produce high best targeted for Brazil's largely low-income drug users (priced at about $2 a hit compared to $40 for heroin). The gangs rooted in Brazil's anarchic prisons run the trade.

Every big ciy now has a Cracolândia, or several. None have dawn attention like the original in Sao Paulo, though – located right in the heart of the country's business and cultural capital. The last time addicts came under sustained police harassment, they protested by setting up camp outside Sao Paulo's premiere concert hall, so that tuxedoed gentry had to step over them on their way into the sympthony. Middle-class residents have also claimed Cracolândia was driving up crime. Police statistics don't entirely bear that out, but almost everyone was afraid to walk through the area.

All told, alcohol causes more social and property damage in Sao Paulo, Ms. Calvacanti says, but it was this encampment that had everyone wringing their hands about drugs.

"It's shocking: 'How can you have a Cracolândia in the middle of a city, with people using drugs right there?'" she says. "It's like a lost neighbourhood in the heart of the city."

Brazil has a federal anti-crack policy ("Crack Can be Beaten"). Its focus has been public education to discourage people from starting to use, and law enforcement targeting those selling drugs; the government funded new beds for in-patient treatment in psychiatric facilities.

But the federal government also sends users to farms, most run by Catholic or evangelical Christian organizations, where they focus on prayer and healing through manual labour. Bruno Gomes, a harm-reduction advocate who works with Cracolândia residents, say the farms typically lack any professional staff trained in addressing drug dependence, and people cycle through them 15 or 20 times without any change in their drug use.

The state of Sao Paulo (the city of Sao Paulo is its capital) also has a program for addicts, built around a legal provision allowing families to commit addicts into residential treatments. This program is popular with desperate parents – about 30 people a day sign up (or are signed up) – but it rarely provides a permanent solution either. Drug users get help while they are in the facility, but they are discharged without a home or job to go to.

So last January, Sao Paulo's newly elected mayor, a left-leaning academic named Fernando Haddad, decided to try something else.

Open arms

The city took over a collection of flophouses around Cracolândia – businesses whose clientele had fled along with most regular commerce in the neighbourhood – and set 400 addicts up in long-term accommodation. They also pitched a big tent on the edge of the fluxo, the shifting mattress camp on the streetcorner where addicts squat, hung up the Open Arms banner and deployed an army of social workers.

They offer primary health care. Three square meals a day. A shower. Help registering for the array of Brazilian social programs that are in theory meant to help people such as these but in practice are underused by addicts, who are typically shut out by their lack of lack a permanent address or the sheaf of documents required by the bureaucracy for registration. If drug users want treatment, they are taken down the street to an outpatient drug-dependency program.

And they are employed: for four hours a day of light labour – such as sweeping sidewalks, pruning public gardens and making coffee in municipal offices.

Sao Paulo's program shares some elements with other experimental approaches to treating drug dependency and associated mental health issues: A program in Amsterdam employs chronic alcoholics as street sweepers and pays them mostly in maintenance doses of beer; Vancouver's Insite program gives injecting-drug users a place to shoot up safely, and links them to health care and other social services.

Still, many people in Sao Paulo doubt Braços Abertos. When it launched, "they looked at us like we were crazy, providing housing and food for zombies, for people who don't want anything from life," says psychologist Mirmila Musse, who works with the program.

She and her colleagues won city funding with the promise that the program would pay for itself just with a reduction in hospital admissions – and that crime would drop too. There is also a growing stack of research to demonstrate that the single best use of resources to help people with chronic mental illness is safe housing.

But the police camp out at either end of the street around Braços Abertos; they leave the drug users alone, but a camera mounted on a giant pole films all the comings and goings.

There is a sense they are just waiting for the whole thing to fail, so they can return to arrests, Ms. Musse acknowledges.

A way out

It is too soon to say whether Mayor Haddad's gamble will pay off.

But people in the program seem equal parts astounded and delighted with the change in their fortunes. Roberto (he uses only a first name) is 37 and has been living on the streets of the city since he was 11; his is the typical profile of an addict here, an immigrant to the city from the poor northeast. He used crack for a long time and still kept it together, he says; he had a wife and a window repair business. But eventually he lost all of it and found himself in the fluxo.

Now, though, Roberto has an assigned apartment. He is making $225 a month sweeping streets, and he is saving it for tools to restart the window-repair business. He is newly engaged to a woman also in Braços Abertos. They are both getting treatment; Roberto says he isn't using at all.

"Without this program nothing would change – you use all day and the police chase you and you get angry and you do things you shouldn't and you get in trouble and then you can't get off drugs," he says. "But with this job, I have a schedule, a routine – a structure. I get up in the morning with somewhere to go. I plan to be somewhere else pretty soon."

Many of the 400 people who drop into Braços Abertos in a typical day identify safe housing and a job, the sense of rejoining a world that seemed closed to them, as the biggest changes in their lives.

"A large number aren't using, others have come down from 20 rocks a day to five – that's a drastic difference in the lives of those people in three months," Ms. Cavalcanti says. Seventy per cent of those given housing have enrolled in treatment, she says, and their adherence rates are far higher than under previous models.

And the program has made a big difference in the feel of the streets of Cracolândia. It's still surreal: in the shadow of a giant neo-colonial train station the street is full of people smocking crack. Many of them seem broken. There is a reek of old urine and scraps of rotted food on the sidewalks. But it doesn't feel threatening. The cheery social workers step determinedly over it all, and a newly employed addict will suddenly bustle through with a large broom, exhorting his colleagues to be more tidy.

Benedikt Fischer, the director of the Centre for Applied Mental Health and Addictions at Simon Fraser University in Vancouver, has studied Brazil's crack problem extensively. He says there is no question that giving people secure housing and work will "help stabilize" them.

"But crack dependence is a complex addiction problem that messes with the brain in negative, harmful, permanent ways. Do they have the resources to deal with that as well?" Brazil's crack epidemic is "a symptom of extreme marginalization," he says, and the country is not tackling the social problems that fuel it.

Mr. Gomes sees that sense of marginalization every day. The clients his harm-reduction organization tries to help are often ex-prisoners, with no way to get a job, many are from rural areas, few have had much education and they have been entirely left out of the swift economic growth here in recent years.

These clients speculate that this new effort to assist them has more to do with getting them off prime real estate than it does with genuine concern for their well-being. "Everyone who is in the program wonders if it will end right after the World Cup," Mr. Gomes says.

For now it's still a priority for the city. Mayor Haddad drives through the neighbourhood in a tinted-window sedan every week or so, and sometimes startles everyone by popping out of the car to grill addicts and social workers on how things are going, Ms. Musse says.

Leon Garcia, the director of prevention at the National Secretariat on Drug Policy in Brasilia, has been watching Braços Abertos with interest. The program reflects the evolution in Brazilian attitudes to drug use in recent years, he says.

"You have to do social response – a place to live, place to work, the ability to go back to school – it's an offer of treatment, and it's an offer of citizenship, and it's not saying you have to do one before you can have the other.

"Is this going to stop gradually the use of crack in the streets? We can't say that. But we're waiting for other cities to take it on in the same spirit, and see."