Developmentalism Meets Neoliberalism

Brazilian cities have gone through remarkable changes in the last half-century. Under the military dictatorship from 1964 to 1985, municipal growth occurred within a centralist planning model, whereby the national government oversaw most economic and urban development. The development agenda, such as it was, put national ambitions ahead of municipal ones.

With the transition to democracy and pressure from urban land reform movements, the new government included a chapter on urban policy in the constitution of 1988. Municipalities gained even greater independence in 2001 through the introduction of Brazil’s City Statute, in which cities became responsible for developing “master plans” through popular participation and community engagement.

According to Raquel Rolnik, a Brazilian urbanist and current United Nations Special Rapporteur on Adequate Housing, these new rules fit neatly into an emerging global neoliberal agenda. In what she calls a “perverse convergence” between urban rights and neoliberal privatization, the city statute has devolved significant power to municipalities as they become entrepreneurial entities competing for federal and international funding. The emphasis on popular participation and consultation has enabled private companies to gain increasing influence in policy circles and affect the flow of government funds.

And state funds are flowing. While the Brazilian government has privatized many of its assets and transferred huge sources of wealth to the private sector, it has remained a developmentalist state in some key regards: the federal government is focused on economic growth and the creation of jobs through investments in infrastructure. This focus was only strengthened following the 2008 global financial crisis. While many other countries imposed austerity measures to reduce state spending, the Workers’ Party (PT) introduced large infrastructure projects as stimulus packages.

But the ways that funds get distributed and spent also matters. Municipalities, like corporations, are either forced to compete against one another for this funding or are given a direct transfer of funds as a product of close political relationships.

Sometimes both happen at once: those who “win” are those who have an inside track. It’s not a coincidence, for instance, that Odebrecht SA — the largest civil construction firm in Brazil and a major financial contributor to the PT — continues to win a massive share of the country’s development projects since the company’s rise during the military dictatorship. Here, developmentalism meets neoliberalism, as state infrastructure investment in redevelopment projects results in a transfer of funds from the public purse into private hands.

Rio de Janeiro is pursuing these redevelopment projects with vigor. The 2014 FIFA World Cup and the 2016 Olympic Games have given the city the opportunity to revamp its strategic and master plans to become a cidade corporativa, or corporate city, in the words of Brazilian urbanist Ermínia Maricato. Rio’s transformation into this corporate city can be better understood by focusing on three of the city’s mega-event projects: Maracanã privatization, Porto Maravilha gentrification, and favela pacification.

Maracanã 2.0

People who know futebol know Maracanã. This stadium is perhaps the most famous in the entire world, familiar for its standing-room-only section that could double in size for large Brazilian matches.

It’s the stadium that some of the best players in the history of the game, like Pelé and Garrincha, have called home. It’s where the infamous “Maracanazo” episode occurred during the 1950 World Cup final, in which Uruguay beat Brazil to accomplish one of the largest upsets in soccer history. Indeed, despite years of military dictatorship and widespread poverty, it’s that loss that many Brazilians still refer to as the lowest point in the country’s history.

Maracanã, in other words, has been much more than a building to soccer fans in Brazil.

But this has dramatically changed with the World Cup and Olympic Games. The stadium has been refurbished to the extent that it is now almost unrecognizable. Or, rather, it looks like any other sanitized stadium space built for international competition. This building, in which corporate boxes have replaced standing crowds, is exactly the sort of sterile environment that municipalities are constructing to climb the hierarchy of world cities that can attract more events, more tourists, and more capital.

A great deal of public money has been invested in refurbishing the stadium to meet the demands of FIFA. Federal, state, and municipal governments have spent approximately USD $598 million on stadium upgrading in Rio, more than double the cost originally projected.

As geographer Chris Gaffney writes, the problem with this spending isn’t simply the amount being invested. The stadium could become a white elephant, useful only for the mega-events. Even more concerning, however, is that this once-public facility has been transformed into private space, with all activities now oriented toward making profit for the public-private partnership that currently manages the stadium.

Maracanã is also a prime example of the new legal spaces that characterize neoliberal globalization. The stadium and its surrounding neighborhood have become “zones of exclusivity,” marketplaces for FIFA and its corporate sponsors. Budweiser, Coca Cola, and McDonald’s can sell their products, but you will have a difficult time finding Brazilian staples churrasco, guaraná, or açaí — or the vendors who have made their living selling such products for years.

Many commentators in Brazil have described this as a state of exception: democratic rules are being suspended for authoritarian and non-transparent forms of governance in the shape of unelected non-governmental organizations like FIFA, the IOC, and Rio’s newly created Public Olympic Authority. Importantly, the Brazilian state doesn’t simply disappear in this arrangement: the government is necessary to pass legislation creating zones of exclusivity and new authorities.

This state of exception also applies to the people who live in the areas surrounding this stadium. Their livelihoods, housing, and bodies are being made exceptional and expendable. In the neoliberal city, the poor are the first ones to be relocated for the sake of profit.

Porto Maravilha

But mega-event developments are not limited to stadiums. The Porto Maravilha (Marvelous Port) project is being hailed as the largest Olympic development project in the city of Rio de Janeiro. The total cost of this five-square-kilometer redevelopment is a whopping USD $4 billion.

Yet the project was never a cornerstone of the Olympic bid and is set to host only a few minor Olympic events. What it is doing is further consolidating the power of the largest public-private partnership the country has ever seen.

The port area of Rio de Janeiro has a rich history. It was the locus of the Atlantic slave trade and remains a center of Afro-Brazilian culture. It was the home of the Portuguese monarchy after they fled the Iberian Peninsula, and more recently was the seat of the federal government. But with the transfer of the nation’s capital to Brasilia in the 1960s, deindustrialization in the 1970s, and flight of businesses to the western part of the city in the 1980s, the area fell into economic decline. Today, the port is home to abandoned factory buildings and low-income communities.

Construction companies, engineering firms, and architectural conglomerates are all but drooling over the possibilities of port gentrification. Port redevelopment projects have figured prominently in the entrepreneurial city’s strategy to attract foreign capital, business, and tourism. In cities around the world, port areas — Puerto Vell in Barcelona, Atlantic Gateway in Manchester, the Inner Harbor in Baltimore, and now Porto Maravilha in Rio — are marked as potential centers of tourism, culture, real estate, and business.

Like spectacles elsewhere, Rio’s mega-events have fostered a veritable “state of emergency.” As researchers Fernanda Sánchez and Anne-Marie Broudehoux have noted, zoning regulations have been changed, tax exemptions granted, and legal mechanisms reformed in order to create the largest consortium of private companies ever responsible for a project in Brazil. This consortium, called Porto Novo, is comprised of three companies — Odebrecht, Carioca, and OAS — that have their hands in many of Rio’s redevelopment projects.

High rollers in Brazil have been pursuing this port redevelopment strategy for a long time, and it wasn’t a coincidence that these companies were awarded the project. In fact, they had been eyeing the port for years. According to Gusmão de Oliveira, the new municipal decree granting them development rights was effectively copied from a private-sector proposal for port redevelopment in 2009 written by these very same companies. The sense of urgency around the Olympics provided the opportunity to rush into this PPP without adequate public oversight.

But who profits through these mechanisms isn’t all that matters. Who gets pushed out, and how, is also fundamental. Neighborhoods can only be revalorized through gentrification after they have been devalued. And it is poor, darker-skinned people who are considered to devalue land in this area. People who have been oppressed and neglected for generations will now be pushed out.

This is accomplished in part through the language and framing of redevelopments. Meu Porto Maravilha, an interactive exhibit set up to showcase the area’s redevelopment plans to the public, describes the port area as “empty” and “derelict.” But a quick look around the port reveals vibrant housing communities, people working on the streets, and local businesses catering to lunch crowds.

Descriptions of “dereliction” and “emptiness” effectively erase the thousands of people without homes, squatter communities, and favela residents who currently live in this area. Rhetorically erased in an attempt to legitimize the project, Rio’s impoverished populations will be physically removed as land values increase and speculation runs amok.

Quiet the Favelas

Nowhere are race, class, and the rhetoric of dereliction more keenly felt than in the pacification of Rio’s favelas. These communities of low-income people have grown rapidly in the last forty years as a result of massive urbanization, developing on hilltops and other environmentally vulnerable spaces that were the only places available to people migrating for work from other areas of the country. The historic neglect and marginalization of favelas by state and municipal governments means that residents have had inconsistent access to the city’s legal infrastructure and services.

During the late 1980s and 1990s, after waves of deindustrialization swept across the country, hitting Rio de Janeiro particularly hard, the drug trade gained a stronghold in the city’s favelas. This was particularly concerning for Rio’s governors and media, because the favelas are located in some of the richer neighborhoods of Zona Sul. This apparent hazard to the wealthy led the municipal and state government to develop a mandate to quash the violence. Mega-events have provided an opportunity to further this agenda.

Military police occupation is central to Rio’s mega-event strategy. The first large-scale military intervention in Rio’s favelas of this era occurred just prior to the Pan American Games in 2007. Hundreds of military police invaded Complexo do Alemão, in Rio’s impoverished Zona Norte, under the guise of “taking back” the community from drug traffickers. Nineteen people, mostly young black boys, were killed during the operation.

In 2008, shortly after Brazil won the rights to host the 2014 World Cup, and as Rio was bidding for the Olympic Games, the state government of Rio de Janeiro introduced the Police Pacification Unit (UPP) program. Supposedly designed to control drug-trafficking territory, the program established a permanent military police presence in numerous favelas.

Complexo do Alemão and other low-income communities have now been invaded by the UPP units. The media has framed the presence as a way to both save “innocent” favela residents and protect tourists and international visitors to Rio.

Pacification is a program designed partly to securitize the mega-events and “protect” favela populations, despite the continued deaths of residents at the hands of the military police. But it also fits into Rio’s broader neoliberalization strategy. It’s often said among the city’s low-income residents that the first group entering the favelas after the military police was Light, the private (formerly state-owned) electricity company. Cable enterprises, bank branches, and garbage collectors soon followed.

The UPP program has been part of a strategy to integrate the favelas into the urban fabric and provide government support where there once was none. But they have also allowed the state to achieve more permanent surveillance within these areas and open them up to state-sanctioned economic development.

The rhetoric of pacification has celebrated the small entrepreneur and tried to attract business interests into these previously “dangerous” and “untapped” communities. Now events are staged to exploit the business opportunities that favelas offer. An event called “Bairro Chic” (Chic Neighborhood) held this past May in a grandiose theater in Rio brought stakeholders from the private sector together to discuss the potential for profit in pacified favelas. Such events, attempting to make favelas trendy, are becoming commonplace in Rio.

As pacified favelas are marketed for commercial development, the value of land is increasing. Particularly in Rio de Janeiro’s Zona Sul, where the areas offer magnificent views of the ocean, land speculation and gentrification have increased dramatically since pacification — so much so that Vidigal, a favela on the West side of Zona Sul, will soon be the next home of soccer superstar David Beckham.

Back to the Streets

On that opening day of the World Cup, I stood with the protesters. There were blocks of favela residents chanting against the police violence of pacification. There were activists holding signs denouncing gentrification of the downtown port area. And there were vendors selling food to protesters, having been banned from the grounds around Maracanã.

On that day, the connections were being made viscerally as demonstrators stood shoulder-to-shoulder on the pavement: Maracanã renovation, Porto Maravilha revitalization, and favela pacification. All privatizing public resources, all dispossessing low-income people. And all part of the veritable legacy of Rio’s mega-events.

It’s true that some Brazilians will make money from hosting the 2014 FIFA World Cup and the 2016 Olympic Games. Indeed, what is particularly insidious about the neoliberal city within a neo-developmentalist Brazil is that massive quantities of public money are being invested in infrastructure developments for the profit of the already rich, who tend to be national and international developers with close financial and political ties to the ruling parties.

But the people are angry. Citizens are demanding change in the streets of Rio de Janeiro and other Brazilian cities. The rhetoric and media discussions of these protests, however, must extend beyond a critique of mega-events. Social movements and demonstrators who are unhappy with Rio’s redevelopment will have to continue taking to the streets and boardrooms to target the governance structures and ideologies that make urban competition and the profit motive the only obvious course for this city.

Of all the cities faced with privatization via mega-events, perhaps Rio de Janeiro can do it differently. Brazilian urban movements have shown in the past that they can effect significant change. It’s because of their efforts that urban rights are enshrined in the country’s constitution. Now, a new generation of activists is fighting to ensure that these rights have meaning in the new Rio.