Brazil's president is pledging to invest at least $1.7 billion to develop Rio de Janeiro's slums.

In a speech on Monday, Luiz Inacio Lula da Silva said the state should meet its obligations to slum dwellers or else drug traffickers will take over the shantytowns.  He added that Brazil can defeat organized crime only if the government improves the country's poorest areas.

Mr. da Silva spoke a few days after a police raid on drug gangs killed at least 13 people in a slum.

The announced investment will provide basic services such as water and sewage systems, as well as basic facilities such as schools and hospitals.  The money is expected to benefit two million families in the state and city of Rio de Janeiro.

Brazil's federal, state, and municipal governments will all contribute to the fund.